Illinois Budget Battle Leads Moody’s to Downgrade Several State Universities
via The Washington Post
“An epic budget battle in Illinois led Moody’s Investors Service to downgrade the credit rating of three of the state’s public universities late Wednesday, the latest setback for schools that have been starved of funding for eight months and now face possible accreditation challenges.
Northeastern Illinois University and Northern Illinois University had their credit ratings lowered to just above junk status, while Eastern Illinois University’s rating is now below investment grade. That means analysts consider revenue bonds issued on behalf of the school to be a credit risk for investors.
‘The downgrade is driven by EIU’s increasing vulnerability to the ongoing state budget impasse given its thin liquidity, declining enrollment and high reliance on state funding,’ Moody’s said in a statement. ‘Liquid reserves are expected to be exhausted by the end of the fiscal year.'”
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