S&P Global Ratings said it lowered its long-term rating to A-plus from AA-minus on the University of Illinois Board of Trustees' outstanding auxiliaries facilities system revenue bonds and certificates of participation, issued on behalf of the University of Illinois.
The outlook is negative.
At the same time, S&P lowered its rating on the university's series 2004 variable-rate COPs to A-plus/A-1 from AA-minus/A-1. The short-term A-1 component of the rating is based on a standby certificate purchase agreement (SCPA) provided by BMO Harris Bank N.A. It also affirmed the AA-plus/A-1 rating on the series 2008 south campus project bonds, which is based on the application of joint criteria and an assumption of low correlation.
"The lowered ratings are in line with our downgrade of Illinois' debt on June 9, 2016," said S&P credit analyst Jessica Wood. "The negative outlook reflects our view of the weakening financial situation in Illinois, its impact on operating appropriations, and the potential for negative rating actions on the university due to the prolonged state impasse and budgetary challenges for fiscal 2016 and 2017."
