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Rider University’s Bond Rating Downgraded by Moody’s

Rider University’s Bond Rating Downgraded by Moody’s

“Rider University reported approximately $89 million in outstanding debt in 2020, the analysts said.”

When you drill into the details below, the financial outlook of the school is not great.

NJ.com reports:

N.J. university’s ‘junk’ bond status downgraded again as money concerns grow

Wall Street is worried about Rider University.

Analysts at Moody’s Investors Service downgraded Rider’s bond rating earlier this week and gave the private university a “negative” outlook. The rating agency cited Rider’s “very weak operating performance,” reliance on a line of credit to cover its expenses and the financial effects of the pandemic at the 4,600-student school.

The Lawrenceville university’s rating was downgraded from Ba1, or “junk bond” status, to Ba2, an even lower version of junk bond status. “Junk” is a term used for below-investment-grade bonds, meaning Moody’s is telling investors Rider is a risky investment and has a chance of not being able to pay back the money it borrows.

“While the university has articulated strategies to improve operations, a turnaround, if achievable, will take multiple years,” said the Moody’s report issued Tuesday.

Rider is among many small- and mid-size private universities that were already struggling to stay out of the red before the pandemic wreaked further havoc on their finances. In New Jersey, Centenary University in Hackettstown and Drew University in Madison are among the private colleges that have publicly discussed their ongoing financial problems.

Many of the smaller private schools are having trouble attracting students when there are less costly public universities nearby with similar programs and amenities.

For Rider, the lower bond rating means it will be more expensive for the university to borrow money for construction or other projects. Rider University reported approximately $89 million in outstanding debt in 2020, the analysts said. That debt rose to about $110 million with the issuance of new bonds in May.

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henrybowman | July 19, 2021 at 6:34 pm

“Many of the smaller private schools are having trouble attracting students when there are less costly public universities nearby with similar programs and amenities.”

Which, in a nutshell, is how we surrendered control of education to government schools in the first place. Those of us who keep telling parents to take their kids out of public schools ignore this very powerful economic cudgel at our peril.


     
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    artichoke in reply to henrybowman. | July 20, 2021 at 12:43 am

    Which degree is more useful: Rider or Rutgers?

    And Rutgers is cheaper. The downside is that Rutgers is probably more willing to flunk you out if you don’t perform.


 
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alohahola | July 19, 2021 at 8:13 pm

Attract students who are into REAL education and not going for the bells and whistles and you won’t need those construction loans.


 
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drsamherman | July 20, 2021 at 11:29 am

Let them go bankrupt. Maybe the campus can go condo and contribute to the tax base instead of pumping out indoctrinated, useless SJWs.


 
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lawgrad | July 20, 2021 at 11:15 pm

Most undergraduates realize that the “grievance studies” majors do not lead to valuable career paths. In fact, those disciplines do not teach critical thinking but rather “group think.”

What is more dangerous is that many colleges have Education majors that lead to teaching certificates and virtually a guaranteed job after graduation. Or worse they offer master degrees in student administration or student counselling, where the graduates go off to coach a new crop of SJW undergraduate activists. Instead of getting a job in the Dean of Student’s Office as the advisor to the fraternities, the assistant deans with their newly minted master degrees advise each separate identity group on how to be even more “woke.” If competing identity groups make conflicting demands upon the Administration, they step in to explain the “intersectionality pecking order” and advise the College President to give everyone everything that they demand.

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