As Anderson University Struggles With Deficits, Fitch’s Outlook Turns Negative

Fitch Ratings lowered its outlook for Anderson University, a private nonprofit in Indiana, from “stable” to “negative,” according to an emailed note Tuesday. In explaining the change, analysts with the credit rating agency pointed to the university’s reliance on temporary measures such as asset sales and “extraordinary” draws on its endowment to cover budget gaps in fiscal years 2023 and 2024, and for an expected deficit in 2025. In fiscal 2024, Anderson fell short of the debt coverage ratio stipulated in its bond terms, which puts the university at risk for a covenant default in 2025, Fitch noted. That could speed up its repayment obligations without accommodation from bondholders.