September 2, 2016 Clifton Ray – ITT Educational Services (NYSE:ESI) is down 13%, reaching a record week low earlier off a trading halt, after the company said in a SEC fling Chubb (CB) was demanding ITT to post collateral of $19.8 million in the form of an acceptable irrevocable letter of credit. Chubb also said it plans to issue notices of cancellation on all of the Surety Bonds, starting with the largest first. Most of the Surety Bonds contain a 30-day cancellation provision. Chubb indicated the cancellation notices are rescindable should the company demonstrate it will be able to operate in a fiscally responsible fashion in the absence of federal student financial aid as noted in the U.S. Department of Education’s letter to the company on August 25, in addition to the additional security the company is required to post to the ED. If the Surety Bonds are rescinded and the company does not maintain an acceptable surety bond for those ITT Technical Institutes where a surety bond is required, the certificate or license for those ITT Technical Institutes can be suspended, invalidated or revoked by the applicable state education agency. The company says it is currently reviewing this demand and its potential impact on the business.
The stock decreased 11.81% or $0.042 during the last trading session, hitting $0.31. About 4.96M shares traded hands or 195.24% up from the average. ITT Educational Services, Inc. (NYSE:ESI) has declined 85.89% since January 28, 2016 and is downtrending. It has underperformed by 100.55% the S&P500.
ITT Educational Services, Inc. is a well-known provider of postsecondary degree programs in the United States. The company has a market cap of $7.19 million. The Firm offers master, bachelor and associate degree programs to over 45,000 students, and short-term information technology and business learning solutions for career advancers and other professionals. It has a 0.36 P/E ratio. It has approximately 138 campuses.