Bowie State University, MD Series 2020 Revenue Bond Rating Lowered To 'BB+' On Student Occupancy, Coverage

GULFPORT (S&P Global Ratings) Jan. 30, 2025--S&P Global Ratings lowered its long-term rating to 'BB+' from 'BBB-' on Maryland Economic Development Corp.'s (MEDCO) series 2020 student housing revenue bonds, issued for Bowie State University's (BSU) Entrepreneurship Living Learning Community (ELLC) project. The outlook is stable. The downgrade reflects our view of lower-than-expected physical occupancy at ELLC in fall 2023 and fall 2024, resulting in debt service coverage (DSC) of 1.05x in fiscal 2024, below covenanted coverage of 1.2x. We expect the project will likely fail to meet 1.2x coverage again in fiscal 2025, which is just the project's fourth full year of operations. "The rating reflects our view of the project's occupancy levels below 90% in fall 2023 and fall

...January 30, 2025 GULFPORT (S&P Global Ratings) Jan. 30, 2025--S&P Global Ratings lowered its long-term rating to '##+' from '###-' on Maryland Economic Development Corp.'s (MEDCO) series 2020 student housing revenue bonds, issued for Bowie State University's (BSU) Entrepreneurship Living Learning Community (ELLC) project. The outlook is stable. The downgrade reflects our view of lower-than-expected physical occupancy at ELLC in fall 2023 and fall 2024, resulting in debt service coverage (DSC) of 1.05x in fiscal 2024, below covenanted coverage of 1.2x. We expect the project will likely fail to meet 1.2x coverage again in fiscal 2025, which is just the project's fourth full year of operations. "The rating reflects our view of the project's occupancy levels below 90% in fall 2023 and fall 2024, with modest cushion above high 85% breakeven occupancy," said S&P Global Ratings credit analyst Travis Nauert. The rating also reflects our view of low maximum annual debt service (MADS) coverage of...

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