Moody’s downgrades Penn State bond debt
Moody’s Investor Services downgraded $893 million in Penn State bond debt on Friday as university trustees prepared to authorize officials to move forward in negotiating settlements with men who claim they are victims of convicted child sex abuser Jerry Sandusky.
Moody’s changed the rating from Aa1 to Aa2.
On Oct. 15, Standard & Poor’s revised the credit outlook for the university from stable to negative but maintained the school’s AA rating for its bonds.
Both agencies cited uncertainty related to the Sandusky scandal.
Sandusky, a former assistant football coach, is serving 30 to 60 years in prison after his conviction for sexually abusing 10 boys on and around the university campus.
Despite the downgrades, Penn State’s credit ratings remain among the top 40 for public-rated institutions in the country, David Gray, senior vice president for finance and business, said in a statement on the school’s website.
“For both agencies, uncertainty of any settlements and outcomes was the primary consideration,” Gray said. “I am confident that our underlying financial status suggests that we will remain among the top universities in creditworthiness.”
Debra Erdley is a staff writerfor Trib Total Media. She can be reached at 412-320-7996 [email protected].