S&P Global Ratings lowered its long-term rating and underlying rating (SPUR) three notches to 'BB' from 'BBB' on Southern Illinois University Board of Trustees' housing and auxiliary facilities system (HAFS) revenue bonds and certificates of participation (COPs), issued for Southern Illinois University (SIU), and placed the ratings on CreditWatch with negative implications. We view both the HAFS and the COPs bond security pledge as equivalent to an unlimited student-fee pledge, and therefore we rate both the same.

"The downgrade and CreditWatch negative status reflect our belief that the state may fail to pass a fiscal 2017 budget by the end of May, which would likely result in no additional operating appropriations distributed to the university for the remainder of fiscal 2017," said S&P Global Ratings credit analyst Jamie Seman.

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