BOSTON Nov 11 The child sex abuse scandal at
Penn State University reached Wall Street on Friday when the
ratings agency Moody's warned of a possible credit downgrade
for the prestigious university.
"Over the next several months, Moody's will evaluate the
potential scope of reputational and financial risk arising from
these events," Dennis Gephart, a senior analyst at Moody's,
said in a release.
Penn State's debt is currently rated Aa1, reflecting very
strong student demand and other credit strengths at
Pennsylvania's flagship university.
Penn State has "approximately $1 billion of rated debt,"
Moody's cited the school's strong academic brand, which it
said has "improved substantially" over the past few decades,
and its ability to draw out-of-state students who pay higher
Graham Spanier, who was asked to step down as president, is
recognized for having lifted the university's academic
reputation during his 16 years as its head.
Moody's said it is watching a number of factors that could
come out of the scandal centered on Jerry Sandusky, the former
assistant football coach who has been charged as a serial
These include potential lawsuits and settlements, weaker
student demand, declines in philanthropic giving, and
significant management or governance changes.