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Penn State: Moody's may downgrade school's credit

8:50 AM, Jul 24, 2012   |    comments
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NEW YORK (AP) - Moody's Investors Service says 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.

Moody's says Penn State has about $1 billion in debt.

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.

(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

AP

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