CHARLESTON — Moody’s Investors Service downgraded Eastern Illinois University’s credit rating on Tuesday.
Eastern is among four Illinois universities to be downgraded; the others are Northern Illinois University, Governors State University and Northeastern Illinois University.
These institutions depend heavily on state funds for operations, according to a press release by Illinois State Treasurer Dan Rutherford.
“This comes after Moody’s placed the long-term ratings of all Illinois public universities under review for possible downgrade on Dec. 18, 2012, due to ‘significant dependence on the state for operating funds and fringe benefits, as well as extensive appropriation payment delays in a challenging budget environment that continues to pressure Illinois’ public universities cash flow and liquidity,” Rutherford said in a statement.
The credit-rating agency’s downgrade will now make it more costly for the universities to borrow money, according to Rutherford.
William Weber, vice president for business affairs at Eastern, said Moody’s decision will not affect the university at this time.
“This downgraded bond rating, while disappointing, was not unexpected in light of Illinois’ continuing fiscal issues,” Weber said. “The downgrade does not have any immediate impact on our outstanding bond issues or on university operations.”
Paul McCann, treasurer and director of business services at Eastern, said the only way the Moody’s downgrade would hinder the university is if officials plan to issue debt or if EIU had variable rate debt.
“We currently have neither plans to issue any debt or variable rate debt,” McCann said.
McCann said he doesn’t see this issue putting a damper on future or existing university plans.
“If we are going to build something or buy something while incurring debt it might affect us, but we currently have no plans to issue additional debt,” McCann said.
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