May 29, 2024
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YU Deal With Montefiore Over Einstein Stalled: Moody’s Gives YU Negative Rating

(The Commentator) – According to a Moody’s report: “the termination of a Memorandum of Understanding with Montefiore Medical Center for the operation of the university’s medical school highlights that the university’s operating challenges will be extended, despite recently implemented efficiency initiatives.”

Without a Memorandum of Understanding on the proposed deal, Yeshiva must now contend with the financial strain that is Einstein, which has operated at a deficit and contributed to two-thirds of Yeshiva’s overall deficit. Expenses continue to mount at the medical school.

Yeshiva’s liquidity is seriously in question, with unrestricted cash and investments covering 90 days of expenses. To compensate, the university has refinanced operating lines with a $175M ten-year private placement. According to Moody’s, “given the severity of deficits and limited liquidity, the university may exhaust liquidity before completing a restructuring of the organization.”

On a good note, positive signs of the restructuring have begun to show, with continued philanthropic support, an endowment still totaling close to $1B, and “greatly improved financial monitoring and reporting, through investments in infrastructure and personnel, providing heightened transparency to key stakeholders to inform strategic decisions.”

Source: Moody’s (http://bit.ly/1qwPHDZ)

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