Governors State University recently had its bond ratings downgraded by Moody's Investors Service.
Moody's said on its website that the school's University Facilities System Revenue Bonds rating went from Ba1 to Ba3 while its Certificates of Participation rating went from Ba2 to B1. Ratings in the Ba range mean the financial obligations “have speculative credit quality and subject to substantial credit risk,” the service said, while obligations in the B range “are considered speculative and are subject to high credit risk.”
GSU's downgrade is fueled by the state's struggles with finalizing a budget for the first time since 2015, the report says.
The Moody's report gave a negative outlook for the school.
“The negative outlook reflects the potential for further credit deterioration given GSU's exposure to ongoing potential delays and reductions in state funding with limited alternative revenue growth potential. Absent state funding, further deterioration of already thin liquidity is highly likely. The negative outlook also reflects expectations for declining enrollment, reversing a previously favorable trend for the university,” the report says.
Moody's review of GSU's outlook began on April 17.
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