Mcdaniel College Md

Fitch Downgrades McDaniel College, Maryland's Revs to 'BBB+'; Outlook Stable

NEW YORK--( BUSINESS WIRE )--Fitch Ratings has downgraded $47.6 million of outstanding revenue bonds issued by the Mayor and Common Council of Westminster County, MD, on behalf of McDaniel College (McDaniel).

The Rating Outlook is Stable.

RATING RATIONALE:

--The downgrade to 'BBB+' from 'A-' reflects McDaniel's materially weakened balance sheet resources, driven largely by recent financial market turbulence, and enrollment volatility.

--The 'BBB+' rating reflects adequate liquidity levels for the rating category and sound debt service coverage.

--Credit concerns include the college's significant reliance on student generated revenues, high debt burden and considerable variable rate exposure.

KEY RATING DRIVERS:

--Preservation of the unrestricted financial cushion at or near current levels.

--Stabilization of enrollment enabling the college to narrow GAAP based operating losses.

SECURITY:

The bonds are a general obligation of the college.

CREDIT SUMMARY:

The financial cushion, historically cited by Fitch as an offset to the college's negative GAAP operating margin (negative operating margin) and revenue concentration in tuition and other student related fees (79.7% of adjusted total operating revenues), has weakened. Balance sheet resources were substantially impacted by investment losses in previous years as well as reclassifications attributable to the Uniform Prudent Management of Institutional Funds Act (UPMIFA). Available funds, defined as cash and investments less permanently restricted net assets, declined 29.6% between fiscal 2007 and 2010, In fiscal 2010, available funds covered total debt ($52.9 million) and operating expenses ($60.2 million) by 74.4% and 84.5%, respectively, which is adequate for the 'BBB+' rating.

Depreciation expense increased 28% between fiscal 2007 and 2010 due to the college's investment in physical plant. McDaniel's largest revenue source, student generated revenues, (79.7% of operating revenues) decreased by a modest 1% over the same period. The combination of these factors led to a negative operating margin in both fiscal 2009 (-1.4%) and fiscal 2010 (-2.6%). While the school successfully held expenditures flat in fiscal 2010 and has a practice of raising tuition and fees annually, revenue flexibility remains limited given the college's rather high tuition discounting rate (40.2% in fiscal 2010) and cost of attendance ($40,340, including room and board).

'See you later, alligator' « OPERATION WARRIOR FORGE

U.S. Army Cadet Command Public Affairs

Cadet John Wahman jumped into the warm Florida swamp water. While bobbing up and down in the water to clear his vision, he looked behind to the boat that held his friends. A quick exchange of words and one friend jumped into the water with him and handed him a knife … just in case.

They moved around the water feeling the swamp floor with their feet for anything. With no luck, Wahman decided to dive into the water to feel with his hands. As he inhales to hold his breath, three feet in front of him is what he was looking for, a full-grown 8-foot alligator.

“When I asked my buddy to jump into the water with me, I did it because I didn’t want to die alone,” Wahman joked. “I could see that when I shot the gator, it went right through his nose. He was pissed off, well alive and about three feet from my face.”

As quickly as he could, he proceeded to hightail it to the boat as fast as possible. It was a very close call considering that, if Wahman reached out, he could have touched the gator.

This close call was the first gator hunt for the Army Cadet from Westminster, Md. He had only been in South Florida for a short time before he made a friend who invited him gator hunting on the swamp and citrus orchards he owns. Life in Florida was going to be very different than it was in Maryland. There were no gators at McDaniel College, but Florida Southern College was another story.

Regiment fail to believe him and his stories. Others want to join him. But when he describes his biggest gator match, it is a wonder why anyone would want to join him.

“My ultimate goal is to be a game warden. But along with that, I want to own a gator farm in the swamp areas in South Florida. My biggest catch was a 13-footer,” Wahman said, smiling. “Well actually, more like an 11-footer, but I tell people 13.”

It is hard to imagine how a kid from Maryland could get into wrestling alligators. But the path to gator wrestling started in high school when Wahman was trying to figure out what to do with his life post high school.

“A colonel at my high school was in charge of the JROTC program. He would always yell at me when he saw me in the hallway with girls. We ended up becoming good friends.” 

It was that friendship that helped Wahman begin the trek to become an officer in the Army. Right before his high school graduation, the colonel asked Wahman what he was going to do. Wahman said he had no plans, considered enlisting and had not applied to any colleges. The colonel then gave Wahman advice that changed his life: check out the ROTC scholarship program at McDaniel College.

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