Moody's Investors Service has downgraded Southern Illinois University's credit rating.
The agency has reduced SIU's rating from A2 to A3 with a negative outlook. The rating action affects $318 million of Housing and Auxiliary Facilities Revenue Bonds, Medical Facilities Revenue Bonds, and Certificates of Participation. Moody's says the downgrade reflects the university's high reliance on the State of Illinois, which also has a rating of A3.
The negative outlook is based on reduced and delayed funding from the state, the likelihood of further enrollment declines and additional borrowing. It says the university is also vulnerable to pension reform at the state level. Moody's says SIU does have some strengths, such as its diversity in programming and revenue as well as fiscal stewardship.
