Moody's downgrades credit rating for College of DuPage

Moody's Investors Service sent a notice to the College of DuPage Thursday stating it officially was lowering the school's credit rating from Aaa to Aa1, just one step below the highest credit grade.

According to a statement issued by Moody's, the decision to downgrade the credit rating was "based on operational risks stemming from the college's accreditation being placed on probation by the Higher Learning Commission."

Moody's analysts acknowledged the school's "robust response" to address the HLC's concerns, but said they believe the issues raised by the commission "reflect a level of governance instability that is not consistent with an Aaa rating."

COD board Vice Chairwoman Deanne Mazzochi said in a statement that Aa1 is "still a very good rating and reflects the college's current financial and academic strengths."

"The college's board and administration will be working diligently over the next year to protect our accreditation to put us on track to ultimately return to a Aaa rating," she said.

Analysts said they settled upon the Aa1 rating due to the college's substantial and diversified tax base with an affluent demographic, as well as its strong financial operations, ample reserves and low debt burden.

In their rating outlook, however, analysts said the college could face an additional credit downgrade if loses its accreditation.