Canadian Higher Education Strength: UofT Credit Rating Affirmed AA+ by S&P Global Ratings

S&P Global Ratings has now confirmed the AA+ long-term issuer rating and senior unsecured debt rating of the University of Toronto with a stable outlook. This move comes as an expression of confidence in its strong market presence, prudent financial policies, and excellent liquidity.

Stable Outlook and Rating Action

In a recent credit action report, S&P Global Ratings cited that the UofT credit action was driven by the university’s ability to maintain a small operating surplus despite challenges raised by changes in enrollment and rising costs. The credit outlook for the University of Toronto, being stable, implies that the university can handle risks effectively.

The authority observed that the ratings might be lowered if the enrollment change affected the revenue negatively, and the changes were not met with appropriate management action. On the other hand, the ratings might be upgraded if the operating margin exceeded 5%, along with an increase in provincial funding and the softening of tuition policies.

Creditworthiness Assessment

This credit-worthiness evaluation rated the following aspects of the Canadian university finance as highly important: the university's enterprise profile, which was judged to be 'extremely strong' or 'very strong,' since UofT has an 'extremely strong' enterprise profile. Additionally, the university's financial profile was rated as 'very strong.' Moreover, the probability of exceptional government support was

In the S&P Global Ratings Affirmation report, it was noted that “federal limits on the permits for international students will impact enrollment, although the university’s reputation will mitigate this effect compared to other similar institutions.”

Enrolment Trends and Market Position

UofT’s fall 2025 enrollment saw an increase of 1.1%, led by an acceleration in domestic students pursuing undergraduate studies. However, international enrollment declined by 4.6%, but UofT still showed slow growth trends. UofT retained its position as Canada’s biggest university, registering an enrollment of over 92,000 students, spread across three campuses. Its international reputation, ranked 21st in the Times Higher Education World University Rankings for 2026, drew students to its three campuses.

Financial Strength and Liquidity

The report about the University of Toronto's credit rating in Canada emphasised that the respective operating margins were expected to continue to be challenged, with an average of approximately 1% between the years 2024 and 2028. Despite this, it was mentioned that the liquidity was exceptional. At the end of their fiscal year in 2025, cash and investments had reached C$8.8 billion, which covered over 200% of their adjusted operating expenses.

The endowment was C$3.9 billion, the highest among Canadian universities, thanks to successful fundraising. The amount of indebtedness stood at C$734 million, which was moderate. The annual cost of servicing the debt was less than 2% of operating expenditure. The sinking fund of C$717 million was reportedly cushioning refinancing dangers. Link to Government Support Ontario was funding around 17% of UofT’s finances in the form of operating grants, in addition to the appointment of some seats on the board.

Analysts felt that the chance of receiving provincial funding if asked was moderately high. Relevance to Shareholders Investors would also recognise an AA+ long-term issuer credit rating as an indication of very high credit quality for U of T. The stable outlook credit evaluation of learning institutions supports their creditworthiness in meeting financial obligations. This extensive credit rating report on the University of Toronto, carried in the S&P Global Ratings regulatory article, discussed how the University of Toronto's credit rating of AA+ contributed to investment and fund confidence.

There was a brief description in the S&P Global Ratings’ news release of what the AA+ credit rating means to the financial position of the University of Toronto regarding liquidity, debt levels, and resilience to enrollment swings.

Conclusion

The S&P Global Ratings maintains the University of Toronto's AA+ long-term issuer credit rating and senior unsecured debt rating with a stable outlook. This University of Toronto credit rating announcement of the report 3495074 published by the S&P Global Ratings is an indicator of the strong financials of the University of Toronto.

Editor’s Note:

S&P Global Ratings reaffirmed the University of Toronto's AA+ long-term issuer and senior unsecured debt ratings with a stable outlook, citing its strong market position, prudent financial management, and excellent liquidity. The rating reflects UofT's effective risk management despite enrollment and operating expenditure trends. A downgrade could occur if enrollment negatively impacts revenue without management adjustments, while an upgrade is possible if operating margins exceed 5% with increased provincial funding and flexible tuition. The analysis highlighted UofT's very strong business enterprise and financial risk profiles, with moderately high provincial support risk. Federal international student visa restrictions are expected to affect enrollment, though UofT's global reputation will temper the impact. Financially, UofT is robust, with C$8.8 billion in funds and investments covering over 200% of adjusted operating expenses, and a C$3.9 billion endowment, the largest in Canada. Its moderate debt (C$734 million) has annual servicing costs below 2% of operating expenditures, protected by a sinking fund.

Skoobuzz noted that the AA+ rating signifies the highest credit quality to investors, and the stable outlook confirms the institution's ability to maintain financial health amid challenges. This verifies UofT as a leader in Canadian post-secondary education and financial management.

FAQs

1. What is the global ranking of the University of Toronto?

The University of Toronto was ranked first in Canada and 21st worldwide in the 2026 Times Higher Education World University Rankings. It continues to be recognised as one of the world’s leading teaching and research institutions, attracting students globally.

2. What is considered a good S&P Global rating?

A good S&P Global rating is generally BBB‑ or higher, as this indicates investment‑grade credit quality. Ratings in the A, AA, or AAA categories are considered very strong, showing that the issuer has a high capacity to meet its financial commitments.

3. What is the highest credit rating given by S&P Global Ratings?

The highest rating on the issuer credit rating scale is AAA. This means the institution or company has an extremely strong capacity to meet its financial obligations, with minimal risk of default.

4. What does AA mean in S&P Global Ratings?

An AA rating means the issuer has a very strong capacity to meet financial commitments. It differs only slightly from the highest AAA rating. The addition of a plus (+) or minus (–) sign shows relative standing within the AA category, such as AA+ or AA‑.

5. What is the meaning of an AA credit rating?

An AA credit rating signifies very high credit quality, just below AAA. It indicates that the issuer is highly reliable, with a very strong ability to repay debts on time and in full. For universities like the University of Toronto, an AA+ rating reflects strong financial resilience, excellent liquidity, and investor confidence.