This press release was originally published by Moody’s Ratings.
New York, September 17, 2026 — Moody’s Ratings (Moody’s) has affirmed the Baa2 rating for Texas Biomedical Research Institute’s (Texas Biomed) (TX) existing revenue bonds. Concurrently, we have changed the outlook to stable from negative. The institute had approximately $182 million in debt outstanding as of fiscal year end 2025.
The change of the outlook to stable reflects Texas Biomed’s improved financial performance, strong strategic management and more stable operating environment.
RATINGS RATIONALE
Texas Biomed’s Baa2 revenue bond rating reflects its very good brand and unique strategic position as the only independently operated biosafety level four laboratory in the US and one of only seven National Primate Research Centers. The institute operates successfully in a market with meaningful and high-cost barriers to entry, and its overall credit profile strongly benefits from its distinctive and specialized scope of operations. Strong strategic leadership and a proven ability to adapt to changing operating conditions are key strengths. Total cash and investments of $112 million at fiscal year end 2025 provides a satisfactory 1.24x coverage of operating expenses and will continue to provide critical financial flexibility given grant delays and an ascending debt service schedule as major capital projects are completed.
The rating incorporates ongoing deficit operations given high interest and depreciation expenses while EBIDA margins will likely remain around 10%. This follows much weaker financial performance in 2024. While federal grant revenues have been disrupted and delayed, Texas Biomed is successfully contracting with private sector customers to supplement revenues and receive higher reimbursement rates. The institute has a large waitlist of contracts for its new high containment research facility, which management estimates will complete construction in late 2028. Until then, debt service coverage will weaken as debt service costs increase progressively through 2029. We expect satisfactory debt service coverage in 2030 as facility projects are completed, new contracts produce revenue and debt service levels reach stability, albeit at a higher level.