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Moody's Downgrades University of Alaska, Citing Cuts

July 18, 2019
 
 

Moody's Investors Service on Wednesday downgraded the credit rating of the University of Alaska system and changed its outlook for outstanding bonds to negative, citing the pending plan to cut roughly 40 percent of the university's annual state appropriation. A veto by Governor Mike Dunleavy, a Republican, stripped $130 million from the system's budget, and legislators failed to override it.

"With this unprecedented single-year cut in state appropriations," Moody's wrote, "there is a high likelihood of a material reduction in the university's liquidity over the next year as it uses cash to fund programs pending restructuring of operations, and for the associate costs of that restructuring."

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