Northern Illinois University's (NIU) bond rating was downgraded by Moody's Investors Service earlier this summer, according to a press release.
The school's Auxiliary Facilities Revenue Bonds rating went from Baa3 to Ba2, while its Certificates of Participation rating went from Ba1 to Ba3. Ratings in the Ba range means the financial obligations “have speculative credit quality and subject to substantial credit risk,” according to Moodys.
NIU's downgrade was fueled by the state's struggles with finalizing a budget for the first time since 2015, the report said, with the fiscal fight affecting the public school's operations and liquidity.
“The negative outlook reflects the potential for further credit deterioration given NIU's exposure to ongoing potential delays and reductions in state funding with limited alternative revenue growth potential. Absent state funding, deterioration of liquidity is highly likely,” the report said.
The service's bond ratings range from Aaa to C. Moody's started its rating service in 1909 in order to have a system to gauge “future relative creditworthiness of securities” for its investors.
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