BRADENTON, Fla. - Sweet Briar College intends to pay all its bills as the 114-year-old women's institution in central Virginia winds down operations, a college spokeswoman said March 5.
Sweet Briar's board of directors voted Feb. 28 to close because of "insurmountable financial challenges" that include declining enrollment and an unsustainable increase in the tuition discount rate needed to attract students to the small, private liberal arts college near Lynchburg.
The college has about $25 million of outstanding long-term debt, including a bank-qualified loan and about $16.52 million in 2006 revenue bonds with maturities through 2030.
Standard & Poor's downgraded the college's bonds to B-minus from BBB because of the pending closure and uncertainty in loan and bond documents that allow for acceleration of the debt.
"Sweet Briar College plans to meet all of its financial obligations," spokeswoman Christy Jackson said in an email to The Bond Buyer.
Jackson also said that the college planned to contact the bond trustee to discuss the best way to communicate with bondholders.
No notice about the closing or any financial problems appeared on the Municipal Securities Rulemaking Board's EMMA filing system as of March 6.
S&P also placed the college's junk-bond rating on CreditWatch with negative implications, and said it would resolve that status once more details are released about Sweet Briar's plan to wind down operations.
"We would lower the rating if college's actions result in an acceleration of all debt outstanding and the college is not able to demonstrate that it can liquidate its endowment in a timely manner," S&P said.
The bonds were issued by the Amherst Industrial Development Authority.
Sweet Briar is on a 3,250-acre rural campus in Amherst County.
About 700 students are currently enrolled. The last graduates will be in the class of 2015. The college will close after the summer session on Aug. 25.
