Standard & Poor's Ratings Services said it lowered its long-term rating and underlying rating to AA-minus from AA on Washington State University's general revenue bonds, student fee bonds, trust and building fee bonds, and recreation center bonds outstanding.
In addition, Standard & Poor's revised the outlook to negative from stable and affirmed its A-plus long-term rating and SPUR on the university's housing and dining system revenue bonds and the A SPUR on the university's parking system revenue bonds. About two years ago, WSU introduced the general revenue security bonds and closed the housing and dining, parking, and athletic securities.
Also, Standard & Poor's assigned its AA-minus long-term rating to Washington State University's series 2015 general revenue bonds.
"The lower rating on the general revenue bonds reflects low financial resources, which have deteriorated since our last review, coupled with the 2015 new money debt that results in weak pro forma debt-related ratios," said Standard & Poor's credit analyst Suzie Desai.
Other considerations include pressures on operating income in fiscal 2014, as well as the state budget that could continue to challenge WSU's operating profile although we understand management is focusing on a more comprehensive planning and budgeting initiative to help manage any unexpected events.
