Moodys Investors Services announced Friday that is is placing Penn States Aa1 revenue bond rating on review for possible downgrade as it assess credit risks stemming from the sexual abuse scandal. In light of the criminal charges against former assistant football coach Jerry Sandusky and two senior university officials, as well as the dismissal of President Graham Spanier and head Coach Joe Paterno, Moodys said it will, over the next several months, evaluate the potential scope of reputational and financial risk arising from these events. While it may take years for the full impact of the events of this week to be known, Moodys said it will also assess the degree of near- and medium-term risks. We will monitor possible emerging risks emanating from potential lawsuits/settlements, weaker student demand, declines in philanthropic support, changes in state relationship and significant management or governance changes, it said in a news release. The Aa1 rating reflects strong student demand, and Penn States status as Pennsylvanias flagship and land grant university, and the strong national academic brand it has developed. The university, it notes, is one of the largest in the U.S., with enrollment of more than 80,000 students, and operating revenues of $4.6 billion in fiscal year 2011, and financial resources totaling $3.9 million.
