Moody's Investors Service said it has downgraded to Baa2 from Baa1 $27.7 million of bonds issued by the New Jersey Educational Facilities Authority on behalf of Georgian Court University after having placed the rating under review for possible downgrade on May 31.

The rating outlook is negative.

The downgrade to Baa2 is based on Georgian Court University's weakening market and financial position evidenced by a trend of unintended enrollment declines and three years of declining net tuition revenue.

The Baa2 rating incorporates the university's modest operations and enrollment, highly competitive market coupled with its traditional market niche of educating women, who comprise 89% of students across a women's college and a university college with evening coeducational undergraduate and graduate programs, as well as significant dependence on student charges off-set by low leverage with sufficient balance sheet resources cushioning debt and operations, adequate debt service coverage, and an all fixed rate debt structure.

The negative outlook reflects challenges faced by the university as it attempts to strengthen its financial and market position by converting to a fully co-educational campus.

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