Louisiana Tech University downgraded two notches to Baa2 by Moody’s
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Louisiana Tech University’s issuer default rating was downgraded to Baa2 from A3 Monday by Moody’s Ratings, which cited the school’s declining liquidity levels. The outlook is negative.
The university plans to market $28 million in revenue refunding bonds, which Moody’s rated Baa3 with a negative outlook.
The downgrade “is driven by further weakening of the university’s already low liquidity position to a minimal level according to management’s preliminary fiscal 2025 results as expenses remain elevated,” Moody’s said. The university’s liquidity has declined for five years. At the end of fiscal 2025 the school had 10 days cash on hand.
The added debt in the near term raises Moody’s concern of weakened leverage ratios. The university has a history of stagnant state operating support, the rating agency added.
But school management outlined initial credible plans to strengthen liquidity in fiscal 2026, Moody’s said.
Enrollment at the public research university has grown in recent years, Moody’s said, and had a full-time equivalent enrollment of 10,398 students in fall 2024.
The university said it “has enjoyed three consecutive years of record freshman classes and leads the state in retention and graduation rates.”
Liquidity concerns arose from “expenditures on physical and digital infrastructure improvements and expanded faculty to meet the needs of our growing student population,” the university said.
However, it added, “any reasonable review of our budget and the positive forecast bolsters confidence in our future operationally.”
The downgrade comes as some
