Mountain State University in West Virginia has redeemed its outstanding tax-exempt debt as the private nonprofit institution winds down its operations.
All its 2004 bonds were called for redemption at 102% on Dec. 1, according to a notice trustee United Bank, Inc. posted on the Municipal Securities Rulemaking Board's EMMA website.
About $5.6 million of debt issued in 2004 by the city of Beckley and the Raleigh County Building Commission was outstanding, according to Moody's Investors Service, which withdrew its B1 rating following the bonds' redemption.
Moody's dropped the rating to B1 from Baa3 in July after the university announced that the Higher Learning Commission of the North Central Association planned to revoke its accreditation.
At the time, MSU spokesman Andrew Wessels said the university fully intended to fulfill its bond and loan obligations. The university also had about $10 million of long-term bank debt.
A year ago, MSU notified bondholders that the accreditation commission had placed the university on notice to correct a series of deficiencies. Earlier this year, the university told bondholders that it also lost a separate accreditation to issue bachelor's degrees for its nursing program.
Nearly two dozen lawsuits have been filed against the school for various reasons, including seven suits by students who claim that the university failed to inform them about the accreditation problems.
Mountain State University was founded in 1933. The main campus is in downtown Beckley, about 50 miles south of the capital of Charleston.
MSU's accreditation was withdrawn in June, and later reinstated through December to allow the university to implement a "teach-out" program for students eligible to graduate at the end of 2012. The University of Charleston became the primary partner to teach-out current students. UC was also negotiating an agreement to establish four-year private college centers in Beckley and Martinsburg by the end of this year
