Moody's Investors Service to review, possibly downgrade, Penn State bond rating

Centre Daily TimesJuly 24, 2012 

The Jerry Sandusky child sex abuse scandal and aftermath could mean a drop in Penn State's bond ratings.

Moody's Investors Service announced today that it has put Penn State's bond rating on review for a potential downgrade. The review affects the university's Aa1 rating and applies to about $1 billion in debt.

According to an announcement from Moody's, the potential change stems from recent events including the Freeh report, the NCAA sanctions and the Big 10 action, along with uncertainty related to other investigations.

The review is expected to be finished in 90 days. It will include assessing the affect of the reports and investigations "which collectively point directly to weaknesses in the university's management and governance practices."The announcement also says the review will include looking at the possible negative effects on student demand and fundraising.

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