Bowie State University, MD Series 2015 Revenue Bond Outlook Revised To Negative On Student Occupancy, Coverage

GULFPORT (S&P Global Ratings) Jan. 30, 2025--S&P Global Ratings revised the outlook to negative from stable and affirmed its 'BBB-' rating on Maryland Economic Development Corp.'s (MEDCO) series 2015 student-housing refunding revenue bonds, issued for Bowie State University's (BSU) Christa McAuliffe Residential Community (CMRC) project. The negative outlook reflects our view of lower-than-expected occupancy at CMRC in recent years, averaging about 91% in fall 2023 and fall 2024, and our expectation that the project will likely not meet its 1.2x debt service coverage (DSC) covenant in fiscal 2025. In our view, a trend of occupancy near current levels and DSC near or below 1.2x would likely result in a downgrade. "The rating reflects our opinion of the project's history of

...January 30, 2025 GULFPORT (S&P Global Ratings) Jan. 30, 2025--S&P Global Ratings revised the outlook to negative from stable and affirmed its '###-' rating on Maryland Economic Development Corp.'s (MEDCO) series 2015 student-housing refunding revenue bonds, issued for Bowie State University's (BSU) Christa McAuliffe Residential Community (CMRC) project. The negative outlook reflects our view of lower-than-expected occupancy at CMRC in recent years, averaging about 91% in fall 2023 and fall 2024, and our expectation that the project will likely not meet its 1.2x debt service coverage (DSC) covenant in fiscal 2025. In our view, a trend of occupancy near current levels and DSC near or below 1.2x would likely result in a downgrade. "The rating reflects our opinion of the project's history of solid occupancy levels, somewhat offset by softer demand in fall 2023 and fall 2024. In our view, current occupancy levels provide modest cushion above a high breakeven occupancy of 85%," said S&P Global...

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