TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Tuesday, April 22, 2014

Four Law Schools' Debt Classified as 'Junk Bonds'

Following up on yesterday's post, Moody's Downgrades Vermont Law School's Bonds to Junk Status:  National Law Journal, Independent Law Schools Suffer Credit-Ratings Slips:

Vermont was the latest stand-alone law school to take a hit from a credit-rating service; in December, Standard & Poor’s concluded that they are especially vulnerable.  “Credit quality has been deteriorating for stand-alone law schools, which are more susceptible to credit deterioration than law schools that are nested within comprehensive universities,” the service said. ... Of the five stand-alone law schools Standard & Poor’s looked at—Albany Law School [BBB], Brooklyn Law School [BBB+], New York Law School [A-]; Thomas M. Cooley Law School [BBB] and Thomas Jefferson School of Law [B+]—it deemed only Albany’s credit outlook stable. ... Moreover, in November Moody’s affirmed the Baa1 rating on Southwestern Law School’s $28.6 million in outstanding bonds. ... Moody’s affirmed Brooklyn Law School’s Baa1 rating in August, giving it a stable outlook.

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