NEW YORK - Moody's Investors Service said it has downgraded its rating on Williston Northampton, Mass.'s (Williston or the school) Series 2005 revenue bonds to Baa2 from Baa1. The outlook is stable at the new rating level.

The Baa2 rating reflects Williston's strong market position as a selective private boarding and day school located in western Massachusetts, healthy monthly days cash on hand, historically strong philanthropic support, and management's focus on reducing financial aid and returning to a 5% endowment draw by FY 2013.

The rating also incorporates the school's multi-year violation of a Series 2005 bond covenant; high tuition discount rate; uncertainty around the impact of future plans to reduce financial aid on student demand; and an operating margin decline in FY 2011 with expected further decline in FY 2012 due to use of reserves to fund capital projects.

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