Fitch Ratings this week downgraded $19.5 million of facility revenue bonds issued by Midland Lutheran College to BB from BB-plus.

The downgrade reflects the private college’s decline in enrollment, ongoing operating deficits, draws on its endowments, and high debt burden, Fitch said. “Should the college fail to stimulate a reversal of current trends over the near term, additional downward rating action may be considered,” analysts wrote.

A small liberal arts college located in Fremont, about 30 miles from Omaha, Midland has recently implemented a series of tuition discounts but still suffered a 9% decline in student enrollment this year compared to last year, leading to ongoing structural deficits, Fitch said.

To bridge the deficits and achieve a small operating margin, the college has recently drawn from its endowment funds. But its investment performance has recently not kept pace with the endowment spending rate, Fitch warned.

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