Standard & Poor's Ratings Services said it lowered its rating on the Suffolk County Industrial Development Agency, N.Y.'s series 1996 and the Brookhaven Industrial Development Agency's series 2002 revenue bonds issued for Dowling College, to D from B.
"The downgrade reflects our assessment of Dowling College's missed interest payments on its series 2002 and 1996 bonds in April and May 2015, respectively," said Standard & Poor's credit analyst Emily Avila. Approximately $295,000 of interest was due in April 2015 and approximately $104,000 of interest was due in May 2015.
Management had the funds available to make the interest payments but elected not to pursuant to the terms of a forbearance agreement that it entered into on June 15, 2015. According to its timeliness of payments criteria, it will apply the D rating if it expects payment will not be made within the earlier of the stated grace period or 30 calendar days after the due date. According to management, Dowling College does not expect to make debt service payments until the forbearance agreement that it entered with a majority of its long-term debtholders terminates on June 30, 2016, unless terminated earlier in accordance with the covenants in the agreement.
