The downgrade last week of Western Illinois University’s debt rating won’t have any operational impact, a university official said Monday, but it is yet another sign that state officials need to resolve the two-year budget impasse.
The ratings agency S & P Global Ratings lowered the credit rating for six of seven public universities in the state. Western Illinois saw its rating fall from BBB- to the non-investment grade of BB-, which is more commonly known as junk status.
The downgrades “reflect the effect of Illinois’ severe budgetary challenges — as demonstrated by its nearly two-year-long budget impasse — on the universities’ financial positions, specifically as it relates to unrestricted cash flows and liquidity,” the agency said.
Matt Bierman, who is the university’s budget director, said the university refinanced some debt in 2015, but it has not gone for new capital in four or five years.
Still, it is yet another unwelcome sign stemming from the logjam in Springfield. “Overall, this is an indication the state needs to keep working toward the budget,” Bierman said.
State appropriations make up an important part of university budgets, and the impasse has significantly restricted cash flows at Western and other institutions across the state.
In addition to the downgrade, the ratings agency also put all state universities on a credit watch, which S & P said reflects its belief that the state may not reach a budget agreement by the end of May.
01-All No Sub,02-Pol,12-Coll,16-Econ,HE Blog,HE Coalition
via Illinois Politics – Google News http://ift.tt/2kWOys2
April 24, 2017 at 02:39PM