Monday, June 6, 2016

Southern University faces credit rating downgrade - Taryn Phaneuf, Louisiana Record

Moody’s Investors Service downgraded the Southern University System debt and issuer ratings earlier this month, citing the school’s financial inflexibility in the face of declining state funding. “The university has made and will continue to make timely bond payments,” university spokesman Henry Tillman told the Louisiana Record. “The downgrade is primarily attributed to many years of state budget reductions. Since 2009, state funding for the Southern University System has decreased by $53.2 million.” Southern’s issuer rating, which is an opinion of Southern University’s ability to honor its debt obligations, dropped from Baa2 to Ba1. In Moody’s rankings, as an issuer moves down the scale, the risk of default rises. Southern University’s former rating was considered a medium investment grade. The new rating puts the university into a speculative grade.

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