U.S. PUBLIC FINANCE CREDIT OPINION Texas State University System, TX 11 October 2019 Update to credit analysis Summary Texas State University System's (TSUS, Aa2 stable) very good strategic profile incorporates the system's large and growing enrollment, serving over 67,000 full-time equivalent (FTE) students across seven component institutions throughout central Texas (Austin, Houston and Contacts southwest regions), supported by robust operating and capital support from Aaa-rated State Mary Kay Cooney +1.212.553.7815 of Texas. Further supporting the Aa2 rating is the sizeable $1.3 billion scope of operations, $1 AVP-Analyst
[email protected] billion in cash and investments, and sound growth prospects in student demand. The rating is tempered by relatively high leverage, which is increasing with the Series 2019 financing, Susan E Shaffer +1.212.553.4132 VP-Sr Credit Officer coupled with moderate financial resources and modest philanthropic support relative to Aa2-
[email protected] rated peers as well as a large net pension liability. CLIENT SERVICES Exhibit 1 Growth in cash and investments is a mitigant to rising debt Americas 1-212-553-1653 Spendable cash and investments to debt Asia Pacific 852-3551-3077 Total debt (bars, left axis) Japan 81-3-5408-4100 Spendable cash and investments (bars, left axis) Spendable cash and investments to total debt (line, right axis) $1,200 1.2x EMEA 44-20-7772-5454 $1,000 1.0x $800 0.8x $600 0.6x $ millions $400 0.4x $200 0.2x $0 0.0x 2014 2015 2016 2017 2018 Source: Moody's Investors Service MOODY'S INVESTORS SERVICE U.S.