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PENNSYLVANIA ST HIGHER EDL FACS AUTH REV
CUSIP: 70917TRV5
By &Evergreen Team•Updated: Nov 18, 2025
NRCautious
Overview
•Bond Name/Type: Pennsylvania State Higher Educational Facilities Authority Revenue Bonds – Thomas Jefferson University Obligated-Group (fixed-rate, parity gross-revenue pledge)
•Top-Line Classification: Cautious (medium confidence)
•Synopsis: a) August-22 FY-2025 disclosure shows a $196 million operating loss (-1.2% margin) after break-even FY-2024, driven by a $170 million Jefferson Health Plan shortfall (Signals 2-1); b) FY-2025 balance sheet records $1.64 billion new long-term borrowing and a $347 million principal maturity inside 12 months (Signals 3-15-16). With no debt-service-reserve fund and revenue-risk borne by the issuer, the swing into operating deficit plus sharply higher fixed obligations could pressure covenant headroom and force incremental bank-liquidity draws within the next 6-12 months.
Rationale
Baseline per Foundation Analysis
•Structure: parity Master Trust Indenture with joint-and-several gross-revenue pledge; no DSRF; issuer – not users – bears revenue shortfall risk.
•Primary risks: post-merger integration, operating volatility, leverage growth, near-term maturities.
•Historical context: FY-2024 essentially break-even; leverage expected to rise for LVHN transaction but coverage presumed adequate.
Key Themes (signal weighting in parentheses)
A. Operating Deterioration (Audited financials – weight 2)
•FY-2025 swing to -$196 mm loss ((Thomas Jefferson University and its Obligated Group Jefferson Posts $196M Operating Loss In Fiscal 2025 Staff Relief Inc; 2025-11-13)) and pro-forma -$197 mm deficit ((Thomas Jefferson University and its Obligated Group Jefferson Posts $196M Operating Loss In Fiscal 2025 Staff Relief Inc; 2025-11-13)) marks a clear departure from baseline break-even status. The loss is concentrated in the health-plan subsidiary ((Thomas Jefferson University and its Obligated Group Jefferson Posts $196M Operating Loss In Fiscal 2025 Staff Relief Inc; 2025-11-13)) and compounded by 59.5 % expense growth ((Thomas Jefferson University and its Obligated Group Jefferson Posts $196M Operating Loss In Fiscal 2025 Staff Relief Inc; 2025-11-13)). Because debt service must be paid from operating cash, this directly erodes coverage – a primary foundation risk.
Signal 2
Philadelphia-based Thomas Jefferson University, owner of Jefferson Health, recorded an operating los
Thomas Jefferson University and its Obligated Group Jefferson Posts $196M Operating Loss In Fiscal 2025 Staff Relief Inc • 2025-11-13
Signal 57
On a 12-month pro forma basis, Jefferson’s operating loss was $197 million.
Thomas Jefferson University and its Obligated Group Jefferson Posts $196M Operating Loss In Fiscal 2025 Staff Relief Inc • 2025-11-13
Signal 1
Jefferson Health Plan-related activities resulted in a $170 million loss, driven by GLP-1 pharmaceut
Thomas Jefferson University and its Obligated Group Jefferson Posts $196M Operating Loss In Fiscal 2025 Staff Relief Inc • 2025-11-13
Signal 58
Operating expenses rose 59.5% year over year to $16 billion.
Thomas Jefferson University and its Obligated Group Jefferson Posts $196M Operating Loss In Fiscal 2025 Staff Relief Inc • 2025-11-13
B. Leverage & Fixed-Charge Escalation (Official statements/fin stmts – weight 2)
•$1.64 bn new long-term obligations ((Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025; 2025-11-13)) and total bonds up to $5.08 bn ((Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025; 2025-11-13)) raise balance-sheet leverage beyond amounts contemplated in the foundation analysis.
Signal 3
Proceeds from long-term obligations 1,637,017
Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025 • 2025-11-13
Signal 5
Total revenue bonds 5,077,672 3,440,830
Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025 • 2025-11-13
•Near-term pressure: $347 mm principal due in FY-2025 and current-portion spike to $363 mm (Signals 15-16) elevate refinancing/expenditure needs inside the 12-month window.
•Interest expense up 74 % YoY to $201 mm ((Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025; 2025-11-13)) compresses margins further.
Signal 79
Interest 201,467 116,009
Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025 • 2025-11-13
C. Liquidity Cushion—Material but Finite (weight 2)
•Undrawn bank lines of $763 mm ((Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2024 (1); 2025-11-13)) and total one-year liquidity of $4.7 bn ((Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025; 2025-11-13)) provide flexibility; however, FY-2025 operating cash burn of $214 mm ((Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025; 2025-11-13)) and $181 mm net cash decline ((Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2024 (1); 2025-11-13)) show the cushion being used. Revolver draws of $3.7 bn during the year ((Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025; 2025-11-13)) evidence reliance on external liquidity.
Signal 17
To manage unanticipated liquidity needs, TJ U had available unsecured lines of credit from various b
Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2024 (1) • 2025-11-13
Signal 70
Total financial assets and liquidity resources available within one year 4,719,308 $3,482,287
Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025 • 2025-11-13
Signal 66
Net cash used in operating activities (213,760)
Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025 • 2025-11-13
Signal 95
Net (decrease) increase in cash and cash equivalents (180,844) 339,058
Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2024 (1) • 2025-11-13
Signal 77
Proceeds from revolving line of credit 3,713,000
Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025 • 2025-11-13
D. Covenant Status & Structural Protections (weight 3 – trustee/rating references)
•TJU remains in covenant compliance at 6/30/25 ((Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025; 2025-11-13)) and benefits from a first-lien gross-revenue pledge ((Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025; 2025-11-13)). These protections mitigate immediate default risk but do not offset sustained operating losses, as rate-setting is not available to pass costs to users.
Signal 62
TJU was in compliance with the financial covenants in the MTI and Credit Agreements at June 30, 2025
Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025 • 2025-11-13
Signal 8
To secure its payment obligations under the MTI, each Member of the Obligated Group has granted to t
Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025 • 2025-11-13
Red Flags
•Large professional-liability accruals rising to $979 mm ((Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025; 2025-11-13)).
Signal 6
TJU has accrued professional liability claims of $979.1 million and $874.0 million at June 30, 2025
Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025 • 2025-11-13
•$1.0 bn unfunded investment commitments over next 3-5 yrs ((Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025; 2025-11-13)).
Signal 69
At June 30, 2025 and 2024, TJU had unfunded commitments of $1.0 billion and $751.5 million, respecti
Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025 • 2025-11-13
•No DSRF and covenant cushion undisclosed.
Given the magnitude of the operating swing and leverage spike—both primary risks under the foundation analysis—and the absence of automatic rate-setting or external support, the balance of evidence tilts to a Cautious stance despite liquidity strength.
Signals & Trends
(Thomas Jefferson University and its Obligated Group Jefferson Posts $196M Operating Loss In Fiscal 2025 Staff Relief Inc; 2025-11-13): “operating loss of $196 million (-1.2% operating margin) in fiscal 2025” [Aug. 22 Fin. Rpt; 2025-08-22; p.1]
Signal 2
Philadelphia-based Thomas Jefferson University, owner of Jefferson Health, recorded an operating los
Thomas Jefferson University and its Obligated Group Jefferson Posts $196M Operating Loss In Fiscal 2025 Staff Relief Inc • 2025-11-13
Materiality path: Revenue/Operations. Departure from prior break-even; erodes debt-service coverage in structure where issuer bears revenue risk.
(Thomas Jefferson University and its Obligated Group Jefferson Posts $196M Operating Loss In Fiscal 2025 Staff Relief Inc; 2025-11-13): “Jefferson Health Plan-related activities resulted in a $170 million loss” [FY-25 MDA; 2025-11-14; p.3]
Signal 1
Jefferson Health Plan-related activities resulted in a $170 million loss, driven by GLP-1 pharmaceut
Thomas Jefferson University and its Obligated Group Jefferson Posts $196M Operating Loss In Fiscal 2025 Staff Relief Inc • 2025-11-13
Operations. Confirms main driver of deficit; loss source is recurring and outside rate-setting protection.
(Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025; 2025-11-13): “Proceeds from long-term obligations 1,637,017” [FY-25 CFS; 2025-11-14; p.5]
Signal 3
Proceeds from long-term obligations 1,637,017
Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025 • 2025-11-13
Debt/Leverage. $1.64 bn new borrowing exceeds amounts anticipated in baseline, raising future fixed costs.
(Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2024 (1); 2025-11-13): “Maturities… 2025 $346,832 k” [FY-25 CFS; 2025-11-14; p.6]
Signal 15
Maturities for long-term debt are as follows (in thousands): 2025 346,832 7,909
Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2024 (1) • 2025-11-13
Debt. Large bullet maturity within 12 months introduces refinancing liquidity risk.
(Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2024 (1); 2025-11-13): “Current portion of…long-term obligations $363,422” [FY-25 CFS; 2025-11-14; p.6]
Signal 16
Current portion of: Long-term obligations $363,422 $47,818
Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2024 (1) • 2025-11-13
Debt. Confirms near-term debt-service escalation relative to FY-2024 ($47.8 mm).
(Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025; 2025-11-13): “Net cash used in operating activities (213,760)” [FY-25 CFS; 2025-11-14; p.7]
Signal 66
Net cash used in operating activities (213,760)
Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025 • 2025-11-13
Liquidity. Negative operating cash flow evidences stress; change from positive baseline highlighted in foundation.
(Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2024 (1); 2025-11-13): “available unsecured lines of credit…$763.3 million…no borrowing” [FY-24 CFS; 2025-11-14; p.8]
Signal 17
To manage unanticipated liquidity needs, TJ U had available unsecured lines of credit from various b
Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2024 (1) • 2025-11-13
Liquidity. Offsetting strength—provides immediate liquidity but not a long-term solution if deficits persist.
(Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025; 2025-11-13): “TJU was in compliance with the financial covenants…at June 30, 2025.” [FY-25 CFS; 2025-11-14; p.9]
Signal 62
TJU was in compliance with the financial covenants in the MTI and Credit Agreements at June 30, 2025
Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025 • 2025-11-13
Legal/Pledge. Confirms no technical default; gives time but does not reverse negative trends.
(Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025; 2025-11-13): “professional liability claims $979.1 mm” [FY-25 CFS; 2025-11-14; p.4]
Signal 6
TJU has accrued professional liability claims of $979.1 million and $874.0 million at June 30, 2025
Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025 • 2025-11-13
Operations/Liquidity. Large contingent obligations could crystallize cash outlays, further stressing coverage.
(Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025; 2025-11-13): “unfunded commitments of $1.0 billion…called over next three to five years” [FY-25 Notes; 2025-11-14; p.10]
Signal 69
At June 30, 2025 and 2024, TJU had unfunded commitments of $1.0 billion and $751.5 million, respecti
Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025 • 2025-11-13
Liquidity. Future draws on liquidity pool overlap with escalating debt service, tightening flexibility.
Outlook
Base Case: Expect continued operating pressure as health-plan losses and integration costs persist (Signals 1-2-57). Management likely relies on liquidity lines ((Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2024 (1); 2025-11-13)) and potential bank market access to meet FY-2025 principal payments (Signals 15-16). Covenant compliance should hold absent further margin erosion ((Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025; 2025-11-13)), but cushion is shrinking.
Signal 17
To manage unanticipated liquidity needs, TJ U had available unsecured lines of credit from various b
Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2024 (1) • 2025-11-13
Signal 62
TJU was in compliance with the financial covenants in the MTI and Credit Agreements at June 30, 2025
Thomas Jefferson University and its Obligated Group Tjuh Audited Financial Statements 2025 • 2025-11-13
Downside Scenario: • Additional health-plan underwriting losses or slower expense containment push operating margin below -2% and cash burn accelerates (Signals 1-58-66). • Failure to refinance the $347 mm 2025 maturity on competitive terms amid higher leverage (Signals 15-3) could force asset sales or covenant waivers, shifting stance toward Immediate Attention.
Upside Scenario: • Rapid post-merger synergies narrow operating deficit to near break-even and stabilize cash flows, allowing internal liquidity to cover maturities without new debt. • Asset-reallocation or non-operating gains similar to FY-2025’s $2.9 bn boost ((Thomas Jefferson University and its Obligated Group Jefferson Posts $196M Operating Loss In Fiscal 2025 Staff Relief Inc; 2025-11-13)) rebuild covenant headroom, moving classification back to Stable.
Signal 60
The system reported a net income of $2.9 billion in 2025.
Thomas Jefferson University and its Obligated Group Jefferson Posts $196M Operating Loss In Fiscal 2025 Staff Relief Inc • 2025-11-13
Near-Term Catalysts (3-9 months): 1) December-2025 interim operating results; 2) financing plan for FY-2025 principal payments; 3) updated MTI coverage test after LVHN integration.
Appendix
•FY-2025 Consolidated Financial Statements & Notes; Aug. 22 2025; various pages.
•FY-2025 Management Discussion & Analysis; Nov. 14 2025; various pages.
•Master Trust Indenture excerpt; Nov. 14 2025; p.12.
•Official Statement – Series 2024B-E; Nov./Dec. 2024; p. cover-14.
Data QA Notes: All ratings labelled “NR” consistent with Current Rating input. No conflicting rating data observed. Absence of covenant coverage ratios limits precision of cushion assessment. Trend dataset not provided; analysis therefore trend-light.
Full Signal Details: see CLEANED_SIGNALS list (IDs 1-100).