U.S. PUBLIC FINANCE

CREDIT OPINION15 August 2016

New Issue

Contacts

Pranav Sharma 212-553-7164AVP-Analystpranav.sharma@moodys.com

Susan I Fitzgerald 212-553-6832Associate ManagingDirectorsusan.fitzgerald@moodys.com

Matthew Kuchtyak 212-553-6930Associate Analystmatthew.kuchtyak@moodys.com

The College of New Jersey, NJNew Sale - Moody's Assigns A2 to The College of NewJersey's $189M Series 2016 Bonds; Outlook Stable

Summary Rating RationaleMoody's Investors Service has assigned an A2 to The College of New Jersey's proposed $189million of fixed-rate Series 2016F and 2016G Revenue Refunding Bonds which have anexpected maturity in 2040. We have also affirmed the A2 rating on outstanding bonds. Theoutlook is stable.

The A2 rating is supported by the college's mid-sized scale of operations ($222 millionrevenue in FY 2015 and over 6,900 full-time equivalent students), with a distinct marketniche in New Jersey that is expected to result in ongoing strong student demand.Conservative budgeting and steady revenue growth have contributed to historicallyexcellent operating cash flow. The strength of governance and management is a key factorsupporting the current stable outlook given the State of New Jersey's (A2 negative) ownfiscal challenges. The college's market strength, combined with good financial planning andforecasting, improves prospects of fiscal stability even as the college confronts what is likelyto be an increasingly challenging state funding environment over the next several years.Offsetting credit considerations include very high financial leverage and resulting moderatedebt service coverage.

Credit Strengths

» Sound student demand as an academically selective public college in New Jersey,resulting in a 14% growth in net tuition per student in the last five years

» Consistently favorable operating performance (FY 2015 operating cash flow margin:19.7%) resulting in still good debt service coverage

» Very good levels of financial reserves and liquidity, with 213 monthly days cash on hand,enhance financial flexibility

» Strong governance and management monitoring financial results throughout the yearand producing monthly financial statements

Credit Challenges

» Very high debt burden, with pro-forma debt to operating revenue of 1.6 times, and debtservice consuming nearly 12% of operations

» Expected increasing pressure on state support, resulting in stagnant to declining statefunding for operations and pension expense

MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE

This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the ratings tab on the issuer/entity page onwww.moodys.com for the most updated credit rating action information and rating history.

2 15 August 2016 The College of New Jersey, NJ: New Sale - Moody's Assigns A2 to The College of New Jersey's $189M Series 2016 Bonds; Outlook Stable

» Expense containment will become increasingly critical for maintaining fiscal stability,given expectations of moderating revenue growth

» Ongoing identified capital needs, with only modest additional debt capacity givenalready high leverage

Rating OutlookThe stable outlook is based on our expectation that TCNJ will maintain solid student demand and will make prudent adjustments tosustain cash flow even in the face of stagnant to moderately declining state operating appropriations.

Factors that Could Lead to an Upgrade

» Substantial growth of financial reserves and revenue to better absorb leverage and provide an enhanced financial cushion in anevolving state funding environment

Factors that Could Lead to a Downgrade

» Sustained weakening of operating cash flow and deterioration of debt service coverage

» Additional sizeable debt issuance without meaningful growth of financial reserves or cash flow

» Further pressure on the State of New Jersey's credit quality or increased expectations of more material state funding reductions

Key Indicators

Exhibit 1

The College of New Jersey, NJ

Source: Moody's Investors Service

Recent DevelopmentsIncluded in Detailed Rating Considerations.

Detailed Rating ConsiderationsMarket Profile: Strong Student Demand in a Highly Competitive MarketTCNJ 's strategic positioning will remain sound driven by its strong student demand, diversified program offerings, and an attractivecampus. The college's market niche of offering an affordable tuition, with a mid-sized enrollment (6,957 FTE students) allows it tocompete effectively with Rutgers, the state's flagship public university, as well as public universities and private colleges in New Jersey,

MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE

3 15 August 2016 The College of New Jersey, NJ: New Sale - Moody's Assigns A2 to The College of New Jersey's $189M Series 2016 Bonds; Outlook Stable

Pennsylvania and Delaware. TCNJ also benefits from having its enrollment diversified among fields related to business, engineering,education, science, nursing, and liberal arts, providing broad stability in the event of a downturn in any single field.

Strong student demand is reflected in college's selectivity (ratio of students accepted to student application received; lower is better)and matriculation rate (ratio of students enrolled to student admitted; higher is better). In fall 2015, the college accepted 49% offreshman applicants, making it the most selective college among New Jersey public universities. Over one-quarter of those acceptedchose to attend in fall 2015. The strength of TCNJ's market position is further supported by its high retention rate of 94% which wasthe highest among all New Jersey public universities. The college is projecting a modest increase in the fall 2016 incoming class. Nettuition per student, a key indicator of pricing power and favorable market position, has grown 14% since FY 2011 to $15,340 in FY2015.

Operating Performance: Positive Cash Flows Continue Despite Stagnation in State Operating SupportTCNJ will continue to achieve sound operating performance given its dedicated fiscal oversight and demonstrated history ofconservatively budgeting for enrollment, and cost containment efforts. High expense growth associated with rising benefit costs haveoutpaced modest tuition increases, somewhat narrowing the historically robust cash flow margin. The FY 2015 cash flow margin was19.7%, covering debt service by 1.7 times. For FY 2016, TCNJ is projecting performance to be similar to FY 2015.

TCNJ has relatively moderate dependence on the state for direct operating support, as only 13% of its operating revenue was derivedfrom direct state support in FY 2015. However, this appropriation has not increased since FY 2012, forcing the college to compensatefor state support that has not kept up with inflation. Per the Governor's recent budget proposal for FY 2017, operating funding for TCNJwill remain at the FY 2016 level ($27.1 million) with a modest increase for fringe benefits funding, a trend for all public universities inNew Jersey where a growing share of state funding is dedicated to employee benefits.

Wealth and Liquidity: Relatively Good Reserves and LiquidityTCNJ has been able to grow its reserves due to retained earnings and improvement in fundraising. Spendable cash and investmentsincreased to $151 million in FY 2015, up from $114 million in FY 2011. As of FY 2015, spendable cash and investments covered over 8months of operating expenses, a reasonably sound cushion given healthy operating cash flow.

LIQUIDITY

The college's liquidity is comparatively strong for the rating category, with unrestricted monthly liquidity of $114 million at the endof FY 2015 providing 213 monthly days cash on hand. Calls for liquidity are currently limited as the college has favorable operatingperformance, no demand debt, no swaps, and no unfunded commitments for private equity investments.

Leverage: Very High Debt Burden Limits Debt Capacity; Pension Burden an Additional Credit ChallengeThe college has very high debt burden with debt to operating revenue ratio of 1.6 times and spendable cash and investments of $151million providing just 0.4 times coverage of $367 million of outstanding debt as of FYE 2015. The aggressive use of debt was a keycomponent in TCNJ's transformation from a teacher's training institution into a selective, nationally recognized liberal arts, businessand education college, attracting highly qualified New Jersey students. Additionally, given that the state support for capital projectsremains below average in New Jersey, TCNJ borrowed for most academic and auxiliary projects.

The college has very limited debt capacity at the current rating. Annual debt service represents over 11% of operating expenses, limitingthe college's financial flexibility. Management reports having future debt plans related to student housing. The timeline and the size offinancing have not yet been determined.

The college also has a public private partnership for the Campus Town project (housing facilities and retail, not for exclusive use bythe college), which includes no direct obligation of the college to support the project. We have not included the debt on the college'sbalance sheet, but monitor the project as a component of the college's capital strategy. Currently credit neutral, the credit impact toTCNJ could change if the college were to provide financial or significant additional support to the project. Phase One of Campus Townopened in fall 2015 and Phase Two will open in fall 2016 with a total of 612 beds that will be fully occupied. The total project cost isestimated at $120 million.

DEBT STRUCTURE

All rated debt is fixed rate and regularly amortizing.

MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE

4 15 August 2016 The College of New Jersey, NJ: New Sale - Moody's Assigns A2 to The College of New Jersey's $189M Series 2016 Bonds; Outlook Stable

DEBT-RELATED DERIVATIVES

None

PENSIONS AND OPEB

TCNJ, like other New Jersey public higher education institutions, is challenged by participation in poorly funded multi-employer definedbenefit plans as well as a defined contribution program that also receives state funding. After Moody's adjustments, the defined benefitpension plans in which the college participates were funded at a weighted average of approximately 26% at FYE 2015, contributing toa $135 million Moody's-adjusted average net pension liability. Combined with outstanding debt, this represents a sizeable 2.3 timesoperating revenue for FY 2015, approximately double the median for all rated public universities.

TCNJ participates in four retirements plans: the Public Employees' Retirement System (PERS), Teachers' Pension and Annuity Fund(TPAF), and Police and Firemen's Retirement System (PFRS) which are defined benefit plans. The college also participates in theAlternate Benefit Program (ABP) which is a defined contribution plan. Employer contributions for all PERS, TPAF, and PFRS participantsand for ABP participants under a maximum contribution limit are paid by the State of New Jersey through appropriated funds. Totalstate appropriations for fringe benefits in FY 2015 of $24.9 million were modestly higher than the FY 2014 level and are expected togrow as the state continues to ramp up pension funding, possibly depressing funding for operations to compensate.

Currently, the college pays the employer pension contribution for ABP participants in excess of the state's maximum limit oncompensation (currently $141,000 per calendar year) for TCNJ employees, amounting to well under 1% of the college’s operatingexpenses.

Governance and Management: Sound Fiscal Stewardship Supports Positive OperationsThe college's management practices, together with its healthy cash flow and budgetary flexibility, are key factors behind maintainingthe A2 rating in spite of the very high debt burden and increasingly challenging state funding environment. TCNJ's sound fiscalstewardship is reflected in conservative budgeting, multi-year forecasting, regular budgetary oversight and consistently strongoperating cash flow.

Legal SecuritySeries 2016F and G bonds are an unsecured general obligation of the college, on parity with the rated debt, and payable from anylegally available funds.

Use of ProceedsProceeds will be used to advance refund a portion of the Series 2008D bonds, a portion of Series 2010B bonds, and to pay the costs ofissuance.

Obligor ProfileThe College of New Jersey is located in the Trenton suburb of Ewing Township and is one of 12 public, four-year institutions of highereducation in the State of New Jersey. The college is best known for its programs in business, education, engineering, humanities,nursing and science. The college has around 7,000 full-time equivalent students and generates $222 million of operating revenue.

MethodologyThe principal methodology used in this rating was Global Higher Education published in November 2015. Please see the RatingsMethodologies page on www.moodys.com for a copy of this methodology.

MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE

5 15 August 2016 The College of New Jersey, NJ: New Sale - Moody's Assigns A2 to The College of New Jersey's $189M Series 2016 Bonds; Outlook Stable

Ratings

Exhibit 2

College of New Jersey, NJIssue RatingRevenue Refunding Bonds, Series 2016 F A2

Rating Type Underlying LTSale Amount $84,000,000Expected Sale Date 08/23/2016Rating Description Revenue: Public University

Broad PledgeRevenue Refunding Bonds, Series 2016 G(Federally Taxable)

A2

Rating Type Underlying LTSale Amount $105,000,000Expected Sale Date 08/23/2016Rating Description Revenue: Public University

Broad PledgeSource: Moody's Investors Service

MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE

6 15 August 2016 The College of New Jersey, NJ: New Sale - Moody's Assigns A2 to The College of New Jersey's $189M Series 2016 Bonds; Outlook Stable

© 2016 Moody's Corporation, Moody's Investors Service, Inc., Moody's Analytics, Inc. and/or their licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND ITS RATINGS AFFILIATES ("MIS") ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDITRISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND CREDIT RATINGS AND RESEARCH PUBLICATIONS PUBLISHED BY MOODY'S ("MOODY'SPUBLICATIONS") MAY INCLUDE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKESECURITIES. MOODY'S DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANYESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKETVALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS AND MOODY'S OPINIONS INCLUDED IN MOODY'S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICALFACT. MOODY'S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHEDBY MOODY'S ANALYTICS, INC. CREDIT RATINGS AND MOODY'S PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND CREDITRATINGS AND MOODY'S PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. NEITHER CREDITRATINGS NOR MOODY'S PUBLICATIONS COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY'S ISSUES ITS CREDIT RATINGSAND PUBLISHES MOODY'S PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY ANDEVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY'S CREDIT RATINGS AND MOODY'S PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FORRETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS OR MOODY'S PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACTYOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW,AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTEDOR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANYPERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT.

All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as wellas other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts all necessary measures so that the information ituses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However,MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing the Moody's Publications.

To the extent permitted by law, MOODY'S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for anyindirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use anysuch information, even if MOODY'S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses ordamages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of aparticular credit rating assigned by MOODY'S.

To the extent permitted by law, MOODY'S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatorylosses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for theavoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY'S or any of its directors, officers, employees, agents,representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY SUCHRATING OR OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER.

Moody's Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody's Corporation ("MCO"), hereby discloses that most issuers of debt securities (includingcorporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody's Investors Service, Inc. have, prior to assignment of any rating,agreed to pay to Moody's Investors Service, Inc. for appraisal and rating services rendered by it fees ranging from $1,500 to approximately $2,500,000. MCO and MIS also maintainpolicies and procedures to address the independence of MIS's ratings and rating processes. Information regarding certain affiliations that may exist between directors of MCO andrated entities, and between entities who hold ratings from MIS and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually atwww.moodys.com under the heading "Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy."

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY'S affiliate, Moody's InvestorsService Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody's Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intendedto be provided only to "wholesale clients" within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, yourepresent to MOODY'S that you are, or are accessing the document as a representative of, a "wholesale client" and that neither you nor the entity you represent will directly orindirectly disseminate this document or its contents to "retail clients" within the meaning of section 761G of the Corporations Act 2001. MOODY'S credit rating is an opinion asto the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors. It would be recklessand inappropriate for retail investors to use MOODY'S credit ratings or publications when making an investment decision. If in doubt you should contact your financial or otherprofessional adviser.

Additional terms for Japan only: Moody's Japan K.K. ("MJKK") is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody'sOverseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody's SF Japan K.K. ("MSFJ") is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a NationallyRecognized Statistical Rating Organization ("NRSRO"). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by anentity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registeredwith the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferredstock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any rating, agreed to pay to MJKK or MSFJ (as applicable) for appraisal and rating services rendered by it feesranging from JPY200,000 to approximately JPY350,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

REPORT NUMBER 1037961

MOODY'S INVESTORS SERVICE U.S. PUBLIC FINANCE

7 15 August 2016 The College of New Jersey, NJ: New Sale - Moody's Assigns A2 to The College of New Jersey's $189M Series 2016 Bonds; Outlook Stable

Contacts

Pranav Sharma 212-553-7164AVP-Analystpranav.sharma@moodys.com

CLIENT SERVICES

Americas 1-212-553-1653

Asia Pacific 852-3551-3077

Japan 81-3-5408-4100

EMEA 44-20-7772-5454