Standard & Poor’s, a financial services company that rates the financial outlook for businesses and other institutions, downgraded the University’s credit rating one grade to AA- due to elevated debt and operating deficits.

Moody’s and Fitch, two other financial rating services, affirmed the University’s Aa2 and AA+ bond ratings, respectively. All three credit ratings are classified as “stable” by the rating services, and despite the downgrade from Standard & Poor’s, are used to describe high-quality and low-risk outlooks.

A bond is a type of security that essentially functions as an IOU. Investors loan money to corporate entities, and then collect the money back with interest. According to the report by Standard & Poor’s, the University has persistent operating deficits and will most likely accumulate more debt in 2017.

According to Fitch, “UChicago’s ‘AA+’ rating primarily reflects its international reputation for academics, research and patient care; strong demand characteristics and exceptional student quality, as well as substantial balance sheet resources and demonstrated fundraising prowess.” However, the report also noted that increased debt is keeping the credit rating from being as high as it could be.

In an effort to boost its academic ratings, the University has increased its debt in the years since the recession, unlike most peer institutions that downsized or postponed projects.

Joseph Neubauer, chairman of the University of Chicago’s Board of Trustees, said in a statement  that the University’s balance sheet is strong and that it has reduced risk in its endowment. He also noted that the University is in the midst of cutting costs and increasing efficiency.

“The Board of Trustees sees the University’s investment in academic eminence as one of our chief priorities and responsibilities. In recent years, we have continued to make investments in the ambitious academic objectives articulated by our faculty, deans, provost and president. Our equally ambitious fundraising efforts are being realized, with Fiscal Year 2015 being the most successful fundraising year in the University’s history,” Neubauer said in an email statement to University spokesman Jeremy Manier.

“Our strategic investments have greatly enhanced the University’s ability to attract and retain outstanding faculty and students, support path breaking research, enhance the quality of the educational experience, and extend the University’s impact around the world,” he concluded.