...Standard & Poor's Ratings Services lowered its rating on the Virginia College Building Authority's revenue bonds, issued for Regent University, to '###-' from '###'. The outlook is negative. The lower rating reflects declines in liquidity and endowment coupled with increasing operating deficits, which management had hoped to control with enrollment and revenue growth. However, because of weaker-than-budgeted net tuition revenue, increased spending on marketing initiatives ($4 million more in fiscal 2014 than 2013) and continued losses at The Founders Inn and Conference Center, the operating deficit continues to grow, totaling negative $11.5 million in fiscal 2014 compared with negative $7.7 million and negative $3 million in fiscal years 2013 and 2012, respectively. Furthermore, Regent still maintains an aggressive endowment spending rate to balance operations and provide funding for strategic needs, which could put further stress on liquidity. Future rating actions will hinge on management's...
