Moody’s report: Penn State’s credit remains strong with stable outlook

April 26, 2018

UNIVERSITY PARK, Pa. – An April 25 report by Moody’s Investor Services lauded Penn State’s strong finances, maintaining the University’s positive Aa1 rating with a stable outlook.

The credit firm’s assessment recognized the University’s “exceptional liquidity and strong operations from diverse, solid revenue sources.” The report went on to say, “Financial leverage is modest and Penn State demonstrates strong governance and management practices.”

Penn State also received an Aa1 rating with a stable outlook in Moody’s previous report, issued in April 2017.

“We are pleased that Moody’s has recognized the University’s responsible stewardship of its fiscal resources and strong management of its finances as we continue on our core missions of teaching, research and outreach,” said David Gray, Penn State’s senior vice president for Finance and Business.

According to Moody’s, contributing factors to Penn State’s strong performance include the University’s $6 billion in operating revenuestrong national student demand; Penn State’s position as a leading research university; and strong governance practices and risk management procedures. Moody’s also cited Penn State’s fundraising momentum, with $171 million in total gift revenue for fiscal 2017.

The agency noted some challenges for the University, including its capital plans for repairing and upgrading its facilities across the Commonwealth, its exposure to the health-care sector, its rising pension and post-retirement benefit payment obligations and strong national competition for students. 

Moody’s concluded its report by stating, “Penn State’s stable outlook reflects expectations of growth in balance sheet reserves from its strong operations and good fundraising, ongoing research success, strong student demand with stable matriculation, and new debt issuance as outlined over the next 18-24 months.”

Last Updated April 26, 2018