CHICAGO — Moody’s Investors Service Tuesday downgraded its long-term rating on DePauw University to A3 from A2, warning that the small Indiana liberal arts school suffers from deeply imbalanced operations.

The downgrade affects $120 million of outstanding bonds. Of that, 63% is in a variable-rate mode, nearly all of which is hedged with interest-rate swaps and supported by letters of credit.

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