Smaller universities see uptick in ratings downgrades

Pittsburgh-based Robert Morris University saw its rating downgraded to Ba1 by Moody’s Ratings last month, joining a wave of small colleges facing ratings pressure due to falling demand.

The private university, which has about $92 million of outstanding debt, is part of a growing list of smaller higher education institutions, particularly in the Northeast, that are facing increasing financial pressures as the pool of potential students shrinks.  

The demand pressures have created two last year. Villanova will take over its buildings for its own purposes. Villanova, which has an AA- rating from S&P and an Aa3 rating from Moody’s, is selling bonds through the Pennsylvania Economic Development Financing Authority  to fund its takeover this week. 

Cabrini made a responsible decision considering its falling admissions and budget deficits, Wood said.

“They could have continued to operate for several years,” Wood said. “They made the decision to look for a partner while they were sort of in a position of some strength … they’ve made some agreements around the name and the continuation of some of the history and legacy of Cabrini University.”