Moody's Investors Service said it has downgraded the College of New Rochelle, N.Y.'s rating to Ba1 from Baa3 on the Series 1999 and 2008 bonds.
The rating outlook is negative.
The downgrade is based on persistent enrollment declines and a challenged student market position, steep enrollment decline in fall 2012, weakening operating performance and thin debt service coverage.
The rating also incorporates the college's high leverage, extremely thin unrestricted liquidity, insufficient liquidity to cover its variable rate demand debt, heavy use of operating lines and a modest balance sheet.
Given the significant challenges faced by the college, the Ba1 rating is based Moody's expectation that the college's relatively new president and leadership team will stabilize enrollment and improve the college's frail financial position longer term.
