S&P Global Ratings placed the issuer credit and revenue bond ratings for Flagler College, Florida, on CreditWatch Negative Friday and said it may withdraw the BBB-plus ratings within 90 days.
S&P said the CreditWatch reflected the college's lack of timely and sufficient information to maintain the rating.
The most recent audited comprehensive financial report available is for fiscal 2023, which ended June 30, 2023.
The school
"The college has recently implemented a new ERP (Enterprise Resource Planning) and HCM (Human Capital Management) system, effective for the June 30, 2024 fiscal year, which has caused unexpected delays in the general ledger data conversion and completion of the annual audit," the school said.
"Flagler College will file its audit and other required financial/operating data as soon as it is available, which it reasonably expects to be on or before … March 31, 2025."
S&P said its action impacts series 2016 and series 2017 revenue bonds issued for Flagler by the Florida Higher Educational Facilities Financing Authority.
The fiscal 2023 ACFR indicated the school had $55 million in long-term debt outstanding and $74.9 million in total liabilities.
S&P downgraded Flagler's bond rating to BBB-plus from A-minus in January 2024. The rating then and now has a stable outlook.
For the downgrade, S&P cited a "significant drawdown on the college's cash and investments for capital projects," substantial increase in the college's debt load, and "continuous enrollment declines during the past few years."
Full-time equivalent enrollment in 2024 had declined 15.7% since 2020. This is partly due to phasing out of the school's Tallahassee campus. Flagler reported an enrollment of about 2,600 in its most recent ACFR.
The school's operating results have been "historically variable," S&P said in 2024.
In fiscal 2022 the school received 81% of its total revenue from gross tuition and fees.
One of the school's main student residences at its St. Augustine campus flooded in July 2022 and largely to make the start of repairs, the school drew down its cash and investments to $85.2 million in fiscal 2023 from $112.7 million in fiscal 2022, S&P reported. The school planned to make additional renovations to the residence through fiscal 2025.
The Bond Buyer tried to contact Flagler College but the school's main receptionist said the computer directory of numbers was temporarily down and she couldn't supply a number for someone to comment.
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