Standard & Poor's Ratings Services said it has lowered its rating on Amherst Industrial Development Authority, Va.'s series 2006 educational facilities revenue refunding bonds, issued for Sweet Briar College, to B-minus from BBB and placed the rating on CreditWatch with negative implications.
"We base the downgrade and CreditWatch placement on the college's announcement that it will close at the end of the current academic year," said Standard & Poor's credit analyst Sussan Corson.
The college's balance-sheet ratios are strong and sufficient resources are on hand to pay debt service. However, certain event of default provisions in the agreements that allow for principal acceleration and the process of winding down operations at the college create significant uncertainty about the timeliness and immediate availability of these resources.
