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YU’s Debt Downgraded To Junk Status

YU’s Debt Downgraded To Junk Status

Yeshiva University’s debt has again been downgraded by a ratings agency, this time to below investment grade, or junk status.

That means lenders will be less inclined to loan YU money in the future, or will be able to charge higher interest rates on it.

“The magnitude of the downgrade to B1 reflects the depth of operating and cash flow deficits concurrent with extremely thin unrestricted liquidity and lack of a clear strategy to regain financial equilibrium,” Moody’s said in its action, taken on $315 million worth of YU debt. The agency also said that it is keeping the rating on review and might cut it further pending review of the university’s 2013 results and other indicators.

The most recent downgrade came from Moody’s, following an earlier ratings cut in October. Standard & Poor’s downgraded the debt in December.

YU is working to fix the problems and was not surprised by Moody’s action, the school said in a statement.

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