Moody’s Investors Service Friday placed its A3 rating on the Peach County, Ga., Development Authority’s student housing facilities revenue bonds on review for possible downgrade.
The review affects $43.7 million of rated debt issued on behalf of Fort Valley State University, part of the state University System of Georgia.
The action reflects a “meaningful and unanticipated decline” in the university’s financial resources, extremely limited cash position and inconsistent operating performance, according to Moody’s analyst Caitlin Bertha.
“The rating action also reflects concern resulting from the university’s accreditation being placed on warning by the Southern Association of Colleges and Schools due to the university’s failure to comply with standards,” Bertha said.
Moody’s said it will review the credit over the next three months, focusing on the university’s cash position, response to the SACS warning and enrollment for this fall.
In addition to the $43.7 million of 2006 fixed-rate bonds, the university has about $40 million of 2008 index-rate, variable-rate bonds privately placed at Wells Fargo Bank NA.
