Henderson State University’s problems with financial uncertainty are continuing, as detailed in a new financial research report.

Henderson State University’s problems with financial uncertainty are continuing, as detailed in a new financial research report.
The bond credit rating business of New York’s Moody’s Corporation, Moody’s Investors Service, has decreased HSU’s financial outlook to “negative.”
This is a downgrade from its previous ranking as “stable.” The university’s past A3 rating, however, was affirmed. Both the outlook and A3 ratings were administered in October 2014. The latter indicates an upper-medium grade while being a low credit risk.
According to Moody’s report, the new actions are indicative of an outstanding rated debt of approximately $32 million. The negative outlook has arisen from the school’s “continued deficit operations through fiscal 2018 with additional use of reserves to cover expenses.”
The report also cites ongoing problems with liquidity dating back five years.
“The university’s liquidity has declined significantly since fiscal 2013 and although the university forecasts for balanced operations beginning in fiscal 2019, operating margins will remain thin. The thin performance means material improvement in liquidity levels is unlikely and some capital expenditures will be deferred. The university’s core student market remains highly price sensitive and this limits potential revenue growth from the university’s largest source, tuition and fees. Positively, management indicates an increase in student demand for the upcoming academic year.”
For fall 2017, Henderson’s enrollment totaled approximately 3,309 full-time equivalent (FTE) students. Fiscal 2017’s operating revenue was approximately $58 million. For this same time period, $12.2 million in student fee revenue provided “9.2x” in debt service coverage.
HSU’s new fiscal year began earlier this week, on July 1.
The ranking comes as more controversy arose at the university over contracts mysteriously being offered to three vice presidents, despite a previous vote of no confidence against them from the faculty senate. In a phone call to the senate’s president elect, he declined to speak on the matter.