Delaware Valley University debt downgraded
Moody's Investors Service downgraded $32 million of Delaware Valley University debt to junk-bond status, citing deteriorating financial performance caused by stagnant revenue from students and the Doylestown school's decision not to adjust its expenses.
Moody's Investors Service downgraded $32 million of Delaware Valley University debt to junk-bond status, citing deteriorating financial performance caused by stagnant revenue from students and the Doylestown school's decision not to adjust its expenses.
Despite the ratings reduction to Ba1 from Baa3, the outlook remains negative because Moody's expects it to be difficult for Delaware Valley to break even and maintain stable liquidity in the near term.
Nearly all of Delaware Valley's financial measures tracked by Moody's deteriorated in recent years, according to the June 30 Moody's report.
Moody's said Delaware Valley's strengths are niches in sustainable agricultural and animal sciences programs and strong donor support, with an average of $3 million a year from fiscal 2013 to 2015.
The institution said the costs of changing its status from college to university added short-term operating costs without adding corresponding increases in revenue. The shift is "expected to yield substantial benefits in the coming years," the university said.
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