Moody’s Investors Service on Friday downgraded Yeshiva University’s rating to Baa1 from A2, and said it would review the university for further downgrade.
The move affects $323 million of debt the Jewish institution issued through the Dormitory Authority of the State of New York.
The rating firm cited continued large operating deficits and “very weak” operating cash flow, thin unrestricted liquidity, modest growth of net tuition revenue, and increased use of line of credit for working capital.
Moody’s action comes days after 24 alumni filed a $380 million lawsuit in U.S. District Court in White Plains, N.Y., against affiliate Yeshiva University High School, alleging school officials with covering up sexual and physical abuse for decades. Moody’s said it would examine the results of an independent investigation.
Moody’s said during the review period, it also would monitor liquidity, fiscal 2013 preliminary financial statements – results based on generally accepted accounting principles – and the ability to stay on budget during fiscal 2014.
A message was left with the university seeking comment.