NEW YORK - Moody's Investors Service said it has placed Saint Mary's College of California's Baa1 underlying rating on Watchlist for possible downgrade.
The rating impacts approximately $67 million of outstanding Series 2007 variable rate bonds issued through the California Educational Facilities Authority (CEFA). The bonds are also rated Aa3/VMIG 1 based on the joint support of Saint Mary's College and the Letter of Credit from Bank of America. Moody's expects to conclude its Watchlist period within the next 90 days.
The rating action primarily reflects the college's limited unrestricted liquidity as compared to its variable rate demand obligations and the heightened risk of acceleration of this debt should the college fail to comply with covenants.
Moody's review of the college will focus on assessing the college's contingency plans to ensure compliance with covenants, the likelihood of acceleration under the LOC, and availability of liquidity in the event of acceleration.
