Moody’s Downgrades University of Illinois

The credit rating agency Moody’s has downgraded the University of Illinois – a move that is a direct response to the state’s unpaid bills and massive pension backlog.

Moody's Investors Service lowered the U of I’s ratings on more than one a half billion dollars in debt.

University spokesman Tom Hardy said it is unclear how the downgrade will affect the sale of bonds to renovate certain facilities, like the hospital on the Chicago campus.

“We’re going to put off that sale for another week or two until we get that final rating,” Hardy said. “That would be the same later this year, early next year for the (State Farm Center) renovation financing package, and so whatever the market dictates at a given time is what we’ll have to work with.”

Moody’s said it is unlikely the U of I would see its rating go up given the magnitude of the state's financial problems. However, the rating agency did credit the university for attracting a large number of students, which will help the U of I offset state funding pressure by bringing in more tuition revenue.

Altogether, Moody’s downgraded seven public universities in the state, with Northern Illinois being the only school to maintain its debt rating.