2011-11-17 / Local & State

Penn State Bond Rating Could Be Downgraded

STATE COLLEGE, Pa. (AP) – A major credit agency warns that Penn State University's bond rating could be downgraded because of risks to its reputation and finances from a child sex abuse scandal.

Moody’s Investors Service said Friday it has put the university's Aa1 bond rating under review for a possible downgrade after ex-coach Jerry Sandusky was charged with molesting eight children over a 15-year period.

Moody’s will assess the potential impact on Penn State of risks from possible lawsuits, a decline in students applying to attend the school, loss of donations from philanthropies and changes in its relationship with the state.

Its strong current bond rating reflects its attractiveness to prospective students, its respected academic program and status as the state flagship and land grant university. That's drawn outof state students paying high tuition rates.

Return to top