http://www.washingtonpost...24/gJQAtofd6W_story.html
NEW YORK — Moody’s Investors Service said Monday it may cut its
rating on Penn State’s credit as the university deals with the fallout
from the Jerry Sandusky child sexual-abuse case and sanctions against
the school’s football team.
The agency has an ‘Aa1’ rating on Pennsylvania State
University’s credit. That is its second-highest possible rating. The
firm said a recent report by former FBI Director Louis Freeh and
sanctions levied by the NCAA could hurt student enrollment and
fundraising for the university, and the school also faces uncertainty in
the form of ongoing federal and state investigations.</p><div class="article_body">
<article>
Penn State has about $1 billion in debt, Moody’s said. A
downgrade could make it more expensive for Penn State to borrow money,
which would be another long-term cost in a scandal that has already cost
the school immeasurably.</p>
The announcement comes a day after the
NCAA fined Penn State $60 million, banned the school from playing in
postseason bowl games for four years, and stripped the team of dozens of
scholarships, among other penalties. The Big Ten conference levied
additional sanctions.</p>
Earlier this month, Freeh delivered a report
on the actions of Penn State leadership and its athletic department
surrounding the actions of Sandusky, a former football coach who awaits
sentencing after been convicted of 45 charges related to child abuse.
Moody’s said the report and other investigations “collectively point
directly to weaknesses in the university’s management and governance
practices.”</p>
The firm said that until before the Freeh report and
the NCAA sanctions, it did not see evidence of weakness in enrollment or
fundraising.</p>
Copyright 2012 The Associated Press. All rights
reserved. This material may not be published, broadcast, rewritten or
redistributed.</p></article>
</div>
so much for that giant endowment - they have giant debt too. And the civil cases have yet to begin.
NEW YORK — Moody’s Investors Service said Monday it may cut its
rating on Penn State’s credit as the university deals with the fallout
from the Jerry Sandusky child sexual-abuse case and sanctions against
the school’s football team.
The agency has an ‘Aa1’ rating on Pennsylvania State
University’s credit. That is its second-highest possible rating. The
firm said a recent report by former FBI Director Louis Freeh and
sanctions levied by the NCAA could hurt student enrollment and
fundraising for the university, and the school also faces uncertainty in
the form of ongoing federal and state investigations.</p><div class="article_body">
<article>
Penn State has about $1 billion in debt, Moody’s said. A
downgrade could make it more expensive for Penn State to borrow money,
which would be another long-term cost in a scandal that has already cost
the school immeasurably.</p>
The announcement comes a day after the
NCAA fined Penn State $60 million, banned the school from playing in
postseason bowl games for four years, and stripped the team of dozens of
scholarships, among other penalties. The Big Ten conference levied
additional sanctions.</p>
Earlier this month, Freeh delivered a report
on the actions of Penn State leadership and its athletic department
surrounding the actions of Sandusky, a former football coach who awaits
sentencing after been convicted of 45 charges related to child abuse.
Moody’s said the report and other investigations “collectively point
directly to weaknesses in the university’s management and governance
practices.”</p>
The firm said that until before the Freeh report and
the NCAA sanctions, it did not see evidence of weakness in enrollment or
fundraising.</p>
Copyright 2012 The Associated Press. All rights
reserved. This material may not be published, broadcast, rewritten or
redistributed.</p></article>
</div>
so much for that giant endowment - they have giant debt too. And the civil cases have yet to begin.