Moody’s Investor Service has downgraded the bond rating of Rutgers University, raising concerns about the financial impact of its merger with the University of Medicine and Dentistry of New Jersey.
The Star-Ledger of Newark reports that Moody’s downgraded the university’s general obligation and parity long-term debt to Aa3 from Aa2.It also assigned a Aa3 rating to $878 million of general obligation bonds. The ratings affect $1.7 billion of debt and will make it more expensive for the university to borrow money.
Rutgers said in a statement Thursday that the university had “long anticipated” that the integration of UMDNJ could lead to a short-term adjustment in its bond rating.
The university says it expects the financial impact to be “insignificant and well within the range of our expectations.”