Standard & Poor's Ratings Services said it lowered its long-term rating and underlying rating (SPUR) to BBB from BBB-plus on Pennsylvania Higher Education Facilities Authority's series 2005A and 2007A revenue bonds, issued for the Slippery Rock University Foundation Inc.'s student housing projects at Slippery Rock University (SRU).

The outlook is stable.

"The downgrade reflects slim annual debt service coverage over the last few years that is expected to persist and declining enrollment for the last three years, with more substantial declines in fall 2013," said Standard & Poor's credit analyst Carolyn McLean. The rating continues to be supported by a trend of strong occupancy at the housing projects as well as strong university connectivity to the housing projects.

Slippery Rock University is one of 14 state-owned institutions of higher education in the Pennsylvania State System of Higher Education. The foundation-owned housing is located in the campus' residential core, adjacent to other university-owned and managed student apartments. The university has a freshman residency requirement, and management has stated that it would request that requirement to be extended to sophomores if needed. No additional housing unit construction is planned.

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