Standard & Poor's Ratings Services said it lowered its long-term rating and underlying rating on New Mexico State University's various revenue bonds to AA-minus from AA.
The outlook is stable.
"The downgrade reflects our view of the continued decline in the university's enrollment through fall 2014, and operating deficits on an adjusted basis through fiscal 2014," said Standard & Poor's credit analyst Charlene Butterfield.
Management has implemented strategies to increase enrollment and while first-time freshmen increased for the first time since fall 2010, preliminary indicators suggest total enrollment will be lower for the fourth year in a row in fall 2015.
The continued enrollment decreases and weak operating performance are not consistent with the AA rating, according to S&P. Supporting the AA-minus rating are solid financial resources, which it believes allow the university to effectively absorb $10 million of expected additional debt in the next 18 months.
