Standard & Poor's Ratings Services revised the outlook on its 'BBB+' rating on Westminster, Md.'s series 2002 and 2006 revenue bonds, issued for McDaniel College, to negative from stable.
The outlook revision reflects Standard & Poor's assessment of the college's enrollment declines, operating deficits on a full-accrual basis, weakening demand profile, and resultant pressure on net tuition revenue.
At the same time, the rating service affirmed its 'BBB+' rating on the debt.
The rating currently remains supported by Standard & Poor's assessment of the college's strong balance sheet and moderate debt burden.
"We could consider a downgrade during the outlook's period if operating deficits were to continue, enrollment were to decline further, or additional debt issuance were to result in a higher debt burden," said Standard & Poor's credit analyst Emily Avila. "We, however, believe a positive rating action is unlikely within the outlook's period because we do not believe the college will generate full-accrual operating results or substantially grow enrollment over that period."