BRADENTON, Fla. - Standard & Poor's revised its outlook to negative on bonds issued for Atlanta's Morehouse College due to declining enrollment and increasing operating pressure.

The outlook change, which could result in a downgrade, came May 5 as S&P affirmed the A-minus rating on the college's bonds issued by the Fulton County Development Authority.

"The negative outlook reflects the college's weakened enterprise profile with continued enrollment declines and softening demand, resulting in increased operating pressure," said analyst Debra Boyd. "Although management has historically been able to address revenue declines due to drops in enrollment through corresponding expense cuts, management's ability to make additional cuts going forward is somewhat limited in our view."

Boyd also said the outlook reflects the chance that further declines in enrollment could cause continued operating deficits and erode financial resources.

"Given the recent turnover in many senior management positions, including the president and chief financial officer, we believe strategies to address these pressures are still in process, and their outcome will take time to be fully realized," she said. "In our opinion, it is too soon to tell if this is the start of a stabilizing credit profile."

Under S&P's rating definitions, an outlook assesses the potential direction of a long-term credit rating over the intermediate term, typically six months to two years.

Outstanding debt at June 30, 2014 was $62.3 million, including $41 million in long-term bonds, $18.6 million in capital leases, and $2.7 million in a variable-rate bank loan.

S&P said the level of debt is very manageable as it is less than half of net property, plant and equipment. Maximum annual debt service of about $5.5 million represents 5.1% of fiscal 2014 operating expenses.

S&P said management indicated that the college is in compliance with covenants, and does not have plans to issue any additional debt.

In the fall of 2014, enrollment fell by 2.9% to 2,106 students from 2,170 the year prior. In the fall of 2005, 3,029 students were enrolled.

"Management attributes these declines to increased competition for its student base, as well as ongoing affordability issue among prospective students," Boyd said.

A year ago, Moody's Investors Service downgraded Morehouse two notches to Baa3 from Baa1.

Morehouse, founded in 1867, ranked No. 3 on U.S. News' 2015 list of Historically Black Colleges and Universities, and No. 133 on list of National Liberal Arts Colleges Rankings.

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