NEW YORK
Jewish Daily Forward
By Doni Bloomfield
Published July 16, 2013.
Yeshiva University’s credit rating has been downgraded by a major ratings agency amid large and growing deficits, a falling endowment and fears of costly litigation stemming from recent allegations of sexual abuse at its high school.
Moody’s downgraded Y.U.’s debt from A2 to Baa1, putting it below the median credit rating for similar institutions.
The agency says that the litigation prospects of the alleged sexual abuse victims will largely determine if the debt is downgraded further.
Since its peak in 2007 Y.U.’s endowment has cratered, falling 45%, doing handily worse than the stock market. Y.U.’s reliance on hedge funds, in particular, has been extremely damaging. It was also slammed by the financial crisis and damaged by its entanglement with Bernie Madoff’s Ponzi scam.
Meanwhile, the federal lawsuit filed last week by former students at Y.U.’s affiliated high school, alleging administrative negligence in response to abuse they suffered there, is demanding over $380 million in damages. According to Moody’s the attendant publicity may have large consequences for Yeshiva’s fundraising efforts.
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