OREANDA-NEWS. S&P Global Ratings revised its outlook to negative from stable and affirmed its 'A-' long-term rating on Missouri Western State University's (MWSU) series 2008, 2010, and 2012 auxiliary system revenue bonds.

"The negative outlook reflects the continuous decline in enrollment over the past couple years, the growing operating deficit, and the subsequent weakening of the financial resources, as measured by unrestricted net assets, which could face continued pressure for fiscal 2016 and potentially fiscal 2017," said S&P Global Ratings credit analyst Gauri Gupta.

Missouri Western State University is in St. Joseph, approximately 50 miles north of Kansas City. It is a four-year, state-supported university serving around 6,000 students with a broad array of programs leading to associate and baccalaureate degrees, as well as a select number of graduate degrees that include nursing, forensic science, health information technology, and applied science.

"The negative outlook reflects our expectation that during the two-year outlook period, enrollment will continue to decline and university-wide operations will remain pressured with expectation of full-accrual deficits in fiscal 2016 and possibly fiscal 2017," added Ms. Gupta. At the same time, we expect that auxiliary system operations will continue to produce adequate debt service coverage and the university will maintain financial resources at least at current levels. We currently do not expect MWSU to issue any additional debt.

We could take a negative rating action if enrollment continues to decline such that full-accrual deficits widen or if financial resource ratios weaken to levels no longer commensurate with the current rating. We would also view negatively any additional debt issuance without a significant increase in resources.

We would consider an outlook revision back to stable during the outlook period if the university can stabilize enrollment and show improvement toward break-even operations on a full-accrual basis while maintaining financial resource ratios at current levels.