Standard & Poor's Ratings Services said it lowered its long-term rating to A-minus from A on Rhode Island Health and Educational Building Corp.'s series 2010A higher education facility revenue bonds issued for New England Institute of Technology (NEIT).
The outlook is stable.
"The downgrade reflects our view of NEIT's substantial debt plans and an increase in the project costs to $59.5 million (all expected to be debt financed) from $40 million (partly debt financed, partly funded by operating cash flow) associated with NEIT's investments in its East Greenwich campus as the institute transitions to serving a more traditional, residential undergraduate base," said Standard & Poor's credit analyst Robert Dobbins.
"We believe operations remain very strong and enrollment has remained relatively stable over the past couple of years," added Dobbins. "However, given the institute's relatively weak enrollment profile for the rating and its status as an open enrollment institution, as well as ongoing construction and transformation risks, we believe the debt profile with its lower than previously expected pro forma debt metrics is more consistent with the lower rating."
