Moody’s Investors Service downgraded the credit rating deeper into junk for Rider University, a private college outside of Trenton, N.J., with about 3,700 students, citing the school’s struggling finances, Bloomberg News reported. Moody’s cut the rating on $119 million of outstanding debt one notch to Caa1, seven levels below investment grade. The rating company also revised the outlook on the debt to stable from negative, according to a release Tuesday. Moody’s categorizes debt within that rating level as in “poor standing” and “subject to very high credit risk.” The downgrade reflects the school’s ongoing deficits and “severely limited” liquidity despite cost cutting measures that saved Rider nearly $10 million in fiscal year 2023, the release said. Despite those efforts, the school is still expected to face operating deficits through at least fiscal 2025. “It’s important to note that Moody’s reports on data from more than a year ago, which is very different from the scenario Rider is experiencing today,” said James Hartman, Rider’s chief financial officer. He said the school is making enrollment, retention and budgetary progress, and is on track to meet financial goals to achieve fiscal sustainability within the next 18 months.
