Continued delays in construction completion for the inaugural Fall 2020 semester of the Provident Group- ULM Properties LLC - University at Monroe Project, LA (Ba3/Negative) and the coronavirus pandemic have resulted in a revenue shortfall for the project despite the availability of capital interest reserve funds to cover debt service. To date only one of the two project buildings is online and leased up. The project’s second building not scheduled to be completed until early 2021.

The delays have led to an overall current occupancy rate of 56% and adversely impacts the project’s ability to generate adequate rental revenues and appropriate debt service coverage levels. Although the capital interest fund balance is sufficient to cover the January 1, 2021 debt service payment, without increases in occupancy and lease up of the second building, the project may require a draw on the debt service reserve in order to cover a portion of the July 1, 2021 debt service.

The rapid and widening spread of the coronavirus outbreak, deteriorating global economic outlook, falling oil prices, and financial market declines are creating a severe and extensive credit shock across many sectors, regions and markets. The combined credit effects of these developments are unprecedented. We regard the coronavirus outbreak as a social risk under our ESG framework, given the substantial implications for public health and safety.

On November 9, 2020 Moody's downgraded the rating to Ba3 from Ba2 and revised the outlook to negative from stable on the $27,000,000 of outstanding Louisiana Local Government Environment Facilities and Community Development Authority Provident Group – ULM Properties LLC – University at Monroe Project , Student Housing Revenue Bonds Series 2019A and Series 2019B.