Wall Street Firm Downgrades Vt. State Colleges Debt Rating
Montpelier — A Wall Street firm has downgraded the long-term debt rating of the Vermont State Colleges from an A+ to an A, saying it believes there is a low likelihood that the state would help out the state colleges in the case of financial emergency.
In the past, there was a moderate likelihood, Standard & Poor’s said.
“This change results in the elimination of a one-notch boost to VSC’s long-term rating; however, its stand-alone credit profile remains unchanged,” S&P said Thursday.
The negative outlook was based on the state colleges’ current operating challenges, including a decline in enrollment, Standard & Poor’s said.
VSC Chancellor Tim Donovan said Friday he wasn’t surprised by the change. “Our underlining rating is still an A, it’s still a quality bond, if we chose to go out and borrow,” he said.
Changing demographics is also affecting enrollment, he said. New England is four years into an eight-year decline in the number of high school graduates, he said.
Overall enrollment at the Vermont State Colleges has dropped about 3 percent in the last two years, but is up about 17 percent from a decade ago, he said.