NEW YORK - Moody's Investors Service has downgraded to Ba2 from Ba1 Wittenberg University, Ohio's long-term rating on its bonds issued through the Ohio Higher Educational Facility Commission. The rating outlook is negative at the lower rating level.

The Ba2 rating for Wittenberg University (Wittenberg or university) reflects the consistently poor operating performance and weak cash flow generation, thin balance resources relative to debt and operations, as well as enrollment and recruiting challenges in a highly competitive region.

The challenges are offset by the university's good operating liquidity and a fixed-rate debt structure. A recent positive development is the intervention of the board to more actively oversee the university's operations, as well as recruit a new president who will join the university in July 2012.

The negative outlook reflects expected continuing enrollment challenges leading to stagnant to declining net tuition revenues from high tuition discounting which will continue to provide operating challenges resulting in weak operating cash flow and debt service coverage.

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