Higher education bonds

The rating agency cited the university's structural budget imbalance and management turnover among factors that drove the outlook revision to negative from stable.

A power struggle over the governance of the Oklahoma Turnpike Authority and a Houston mayor ending a legal dispute with firefighters that could improve the city's Fitch rating are among the legal stories bond market professionals are watching.

Some public colleges in the Midwest are facing budgetary squeezes paired with programming directives from state legislators, a departure from trends elsewhere.

Moody's Investors Service placed the university under review for downgrade, citing in part debt that would be issued to purchase the University of Phoenix.

Nearly half of America's private colleges and universities reported negative operating margins in fiscal year 2023, and the trend was even worse in the Midwest.

The Education Finance Council is seeking clarification on bond rules related to student loans.

With its cash balance eroding due to a budget imbalance, the university, under the watchful eye of Arizona's governor, will undergo system-wide changes.

Moody's Investors Service cited thinning operating performance for the downward outlook revision.

Lake Erie College entered into a forbearance agreement with bondholders after the school didn't meet certain covenants it agreed to as part of a debt sale. 

Gov. Katie Hobbs' proposed fiscal 2025 budget calls for agency fund sweeps, a new eligibility requirement for a costlier-than-expected universal school voucher program, and other measures to combat a rising shortfall.

The negative outlook on the Phoenix-based university's Ba1 rating is due in part to its battle with federal regulators, including the U.S. Department of Education, which it sued in 2021.

The Arizona Board of Regents adopted a report recommending greater oversight of its three universities after the University of Arizona hit financial trouble.

"Higher education is going to be facing continued challenges in the near term," said Tom Kozlik, managing director at Hilltop Securities.

The approval last month by Texas voters of a constitutional amendment to create an endowment fund led S&P Global Ratings to revise the school's outlook to positive from stable.

The City Colleges of Chicago is planning to issue $201 million in unlimited tax GO refunding bonds, bolstered by an upgrade and a new positive rating outlook.

The College of Saint Rose, a private Roman Catholic school in Albany, said Friday it plans to close after this academic year.

Villanova University in Pennsylvania is rescuing bondholders who own debt of Cabrini University, a small nearby Catholic school that is closing in 2024.

The data indicates that 2023 could be "the potential start of a long-feared trend toward more higher ed impairments and, possibly, defaults," MMA's weekly Outlook report said.

At least two schools are facing the legal costs of terminating the transactions as well as pursuing alternative financing for almost $500 million in construction projects.

Economic and demographic trends working against revenues at U.S. higher education institutions are very evident in West Virginia at the start of the school year.