Moody's Investors Service said it downgraded Vassar College, N.Y.'s $253 million in rated debt to Aa3 from Aa2.
The outlook is stable.
The downgrade to Aa3 reflects the expectation that operations will continue to be imbalanced despite cost reduction strategies implemented by the college. The rating agency also expects elevated endowment draws will lead to a continuation of slower growth of cash and investments than peer colleges.
The rating positively incorporates Vassar's market position as a highly selective liberal arts college located approximately 90 minutes from New York City, healthy cash and investments and liquidity, and no plans for additional debt.
The rating also reflects elevated, though decreasing, endowment draws and modest cash flow leading to thin debt service coverage.
