Moody's Investors Service said it placed the Caa1 rating of Dowling College, N.Y., on review for possible downgrade.

The rating action impacts $14.2 million of rated debt (Series 1996 and Series 2002 bonds). The Series 2002 bonds were issued through the town of Brookhaven Industrial Development Agency, and the Series 1996 bonds were issued through the Suffolk County Industrial Development Agency.

The rating action reflects the recent unusual announcement by the college that the president will be leaving well before his contract expiration date (2014). The president started at Dowling in June 2011.

At the time of his appointment in 2011, Moody's believed the president's previous professional experiences with college turnarounds was credit positive for Dowling. Dowling has had multiple presidents over the last decade.

The low rating reflects Moody's ongoing concern about the college's very thin unrestricted liquidity, deteriorating student market position with multiple years of pressure on enrollment, and expected operating deficit in FY 2012 driven by the enrollment decline in fall 2011.

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