Moody’s downgrades Wheaton’s rating to A3, says outlook stable

WHEATON COLLEGE'S series 2010 bonds have been downgraded from A3 to A2 by Moody’s Investors Service.
WHEATON COLLEGE'S series 2010 bonds have been downgraded from A3 to A2 by Moody’s Investors Service.

NORTON – Wheaton College’s series 2010 bonds have been downgraded from A3 to A2 by Moody’s Investors Service, which cited “fundamental challenges in its student market” as the reason.
Moody’s, in an April 7 report, said net tuition revenue, the college’s largest revenue source, has been stagnant over the past five years, affecting operating performance.
It also said the college’s operating deficits, projected to continue until fiscal 2018, have hampered financial- resource growth relative to peers.
The outlook is stable at the new rating level, Moody’s said, adding it expects stabilization of enrollment, and modest increases in net tuition revenue and operating performance over the next few years.

“The A3 rating is supported by the college’s very strong flexible reserves relative to debt and
expenses, as well as its fundraising track record,” Moody’s said.

It said enrollment at the small, private college was 1,577 last year, a decline from 2014’s 1,581 and 2011’s 1,628.

It said the college has $33 million in direct debt, which is less than $43 million in 2011. It generates approximately $75 million in revenue, an increase from 2014 when it generated $74.4 million.

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Wheaton spokesman Michael Graca said to help grow enrollment, the college is reaching out to high school students earlier than in years past, as high school students are starting to search for colleges earlier than their junior year.

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