Standard & Poor's Ratings Services said it lowered its long-term rating and underlying rating to AA-minus from AA on Georgia Private College & University Authority's outstanding revenue debt, issued for Agnes Scott College.
The outlook is stable.
"The downgrade reflects our opinion of the decline in enrollment for fall 2014, and the risk of implementation for the college's new Summit program," said Standard & Poor's credit analyst Bianca Gaytan-Burrell. In addition, although operating performance showed slight improvement in fiscal 2014 compared with prior years, it did so only through an increase of net assets released from restrictions, as well as a very high endowment spend rate of 5.9%, both of which are not sustainable in the long term," added Gaytan-Burrell. "Financial operations in our opinion are not indicative of the AA rating. Financial resource ratios are at the median of the private university universe and have not kept pace with other private universities and should be above the medians in order to compensate for the weak operating performance."
