Yeshiva U., Just Weeks of Cash on Hand, Downgraded

March 7, 2014

Yeshiva University’s many financial woes continue, according to yet another recent downgrade by Moody’s Investors Service, which considers Yeshiva's bonds to be junk.

The highly respected Jewish university in Manhattan has only enough cash on hand to cover seven weeks of operations, though it has a $75 million line of credit that can cover an additional 42 days, according to Moody’s. The university also revealed, in this week’s belated release of its audited financial statements for last year, that its operating losses were $173 million from summer 2012 to summer 2013. Moody’s expects a similarly dismal performance this year.

Yeshiva also got a warning from its accreditor, the Middle States Commission on Higher Education, which found insufficient evidence that the university is assessing student learning.

On the upside, the university has a $1.1 billion endowment, relatively stable enrollment and a plan to sell $250 million worth of real estate. Yeshiva is working on a plan to turn things around, but Moody’s analysts worry it will take too long, so the rating agency’s outlook for the university is negative. “Given the severity of deficits and low liquidity, we anticipate it will take several years before management, in conjunction with consultants, can stabilize financial performance,” the analysts wrote.

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