Moody's Investors Service has downgraded Agnes Scott College's rating to A3 from A2 on the Series 2004A and 2004B revenue bonds issued through the Georgia Private Colleges and Universities Authority.

The rating outlook is stable.

The downgrade of Agnes Scott College's rating to A3 is driven by further deterioration of expendable financial resources coupled with two years of out-sized operating deficits and exceptionally thin or negative cash flow margins leading to very weak debt service coverage, as calculated by Moody's.

Underpinning the A3 rating and stable outlook are the college's ample balance sheet and liquidity and also reflects our expectation that management's new enrollment initiatives will improve demand metrics and maintain a stable market position.

Also incorporated into the rating is the college's high debt burden, deep structural operating deficits, small revenue base and a highly competitive market for a narrower applicant pool as a women's college.

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