Moody’s Upgrades Penn State’s Credit Rating

Now that Penn State has reached settlements with most of Jerry Sandusky’s sex abuse victims, the university has received a boost in its credit rating. Moody’s Investors Service announced Wednesday that it has revised Penn State’s Aa2 long-term rating on debt from stable to positive.

“The revision … reflects the resolution of most of the settlement claims arising from last year’s sexual abuse scandal combined with the university’s continued strengthening of liquidity and strong operating performance,” Moody’s says in a news release.

According to Moody’s, Penn State should now be able to absorb any remaining claims. Moody also says that the university’s operating margin and performance will strengthen throughout the coming fiscal year.

Some of Penn State’s strengths noted by Moody’s include strong liquidity and healthy fundraising.

Moody’s does list challenges the university still faces, including rapid governance changes. The investor’s service also says Penn State operates the The Milton S. Hershey Medical Center which faces healthcare challenges.

Penn State President Rodney Erickson says the university has been working to change university policies and procedures ever since Penn State was downgraded in October 2012 as a result of the Jerry Sandusky sex abuse scandal.

“The expectation expressed by Moody’s and reaffirmed every day at Penn State is that we will continue to evolve as a leader in governance and remain one of the best universities in the world,” Erickson says.

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