DALLAS - Standard & Poor's revised its outlook to negative on New Mexico State University's AA rating, citing three years of falling enrollment.
The action on July 1 came more than three months after Moody's Investors Service downgraded the university's debt to Aa3 from Aa2.
"The negative outlook and the ratings reflect our view of the continued decline in the university's enrollment and applications for the third year in a row," wrote Standard & Poor's credit analyst Carlotta Mills. "We understand that management is developing and implementing strategies to increase enrollment, though preliminary indicators suggest enrollment will be flat at best in fall 2014."
NMSU had $137 million of long-term debt outstanding as of June 30, 2013, according to S&P.
NMSU is one of seven public four-year universities in New Mexico. In addition to its main campus in Las Cruces, about 40 miles north of El Paso, Texas, NMSU operates four branch campuses that offer two-year associate degrees and technical degrees. Branch campuses are located in Las Cruces, Alamogordo, Carlsbad, and Grants.
Enrollment declined 7% from fall 2011 to fall 2013, according to Moody's, reflecting fewer high school graduates in the state.
Full-time-equivalent enrollment of 21,611 in fall 2013 represented a 3% drop from fall 2012. Applications continued to decline in fall 2013 by nearly another 10%, according to S&P.
The university reported in May that applications and deposits were behind compared to spring 2013.
"The university has never been highly selective, and about 81.5% of first-year applicants have been accepted during the last five years," Mills wrote. "During the last five years, about 42.3% of admitted students matriculate, indicating, in our opinion, an academic niche."
