Moody's Investors Service said it downgrades Hocking Technical College, Ohio's $19.6 million of outstanding general receipts revenue bonds to Baa1 from A3.
Concurrently, it removed the rating from review for possible downgrade.
The rating outlook is stable. It also rates an enhancement for these bonds provided by The Ohio Community and Technical College Credit Enhancement Program (Ohio Board of Regents State Credit Enhancement Program). That rating is Aa2 stable. The intercept rating was not placed under review and is not affected by the current rating action.
The downgrade to Baa1 reflects the college's pressured market position in rural Ohio and thin liquidity. It also captures projections that Hocking's operating performance will weaken during fiscal 2014 and fiscal 2015.
Enrollment at the college declined substantially as the local economy improved after the financial crisis, with headcount down 47% since fall 2010.
Given a high degree of tuition dependence (65% of fiscal 2013 operating revenue), these enrollment declines have served as the key catalyst for the weakening of the college's finances.
