N.J. university's 'junk' bond status downgraded again as money concerns grow
Wall Street is worried about Rider University.
Analysts at Moody’s Investors Service downgraded Rider’s bond rating earlier this week and gave the private university a “negative” outlook. The rating agency cited Rider’s “very weak operating performance,” reliance on a line of credit to cover its expenses and the financial effects of the pandemic at the 4,600-student school.
The Lawrenceville university’s rating was downgraded from Ba1, or “junk bond” status, to Ba2, an even lower version of junk bond status. “Junk” is a term used for below-investment-grade bonds, meaning Moody’s is telling investors Rider is a risky investment and has a chance of not being able to pay back the money it borrows.
“While the university has articulated strategies to improve operations, a turnaround, if achievable, will take multiple years,” said the Moody’s report issued Tuesday.
Rider is among many small- and mid-size private universities that were already struggling to stay out of the red before the pandemic wreaked further havoc on their finances. In New Jersey, Centenary University in Hackettstown and Drew University in Madison are among the private colleges that have publicly discussed their ongoing financial problems.
Read more: https://www.nj.com/education/2021/07/nj-universitys-junk-bond-status-downgraded-again-as-money-concerns-grow.html
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