Standard & Poor's revised the outlook on its AA and AA/A-1-plus ratings on Delaware County Authority, Pa., Series 2008, 2010, and 2010A-2010B college revenue bonds, issued for Haverford College, to negative from stable.
The outlook revision reflects the rating agency's opinion of the college's emerging trend of full-accrual deficit operations and very high debt burden.
"We believe Haverford will likely continue to generate full-accrual deficits due to higher discounting and expenses that are growing faster than revenue. We believe that operations will likely remain pressured and that they could pressure the balance sheet over the next two years," said credit analyst Emily Avila. "We also expect the college to maintain its stable enrollment and impressive demand profile."
Avila said S&P could revise the outlook to stable were the college to return to balanced or positive operations on a full-accrual basis while keeping its endowment drawdown at an acceptable level and if it were to improve its finances through successful fundraising and better investment performance.
The college is in Haverford, Pa., along suburban Philadelphia's Main Line corridor.
