Moody’s Investors Service issued a bond-rating downgrade—from Baa3 to Ba1—and a negative outlook for the College of New Rochelle on Wednesday. The downgrade was “based on persistent enrollment declines and a challenged student market position, steep enrollment decline in fall 2012, weakening operating performance, and thin debt-service coverage,” according to Moody’s.
The bond-rating service also cited the New York college’s “high leverage, extremely thin unrestricted liquidity, insufficient liquidity to cover its variable-rate demand debt, heavy use of operating lines, and a modest balance sheet.”
Moody’s did note that the college’s new president, Judith Huntington, who was vice president for financial affairs from 2001 to 2010, could yet stabilize the institution.
The college said that Ms. Huntington was not available for an interview. Instead, the college issued a statement that brushed off the downgrade and said that it was working on a strategic plan that would strengthen its finances.
“In light of the fact that Moody’s last week revised its outlook for the entire United States higher-education sector, including its market leaders, from ‘stable’ to ‘negative,’ we were not surprised by this rating change,” the statement said.