Sex scandal brings negative rating outlook to Penn State

Reuters News
Posted: Oct 15, 2012 5:18 PM

(Reuters) - Standard & Poor's Ratings Services revised the outlook on Pennsylvania State University's AA rating to negative from stable, citing financial uncertainty from litigation resulting from a sex abuse scandal that resulted in the conviction of its former assistant football coach.

Jerry Sandusky was sentenced earlier this month to 30 to 60 years in jail on 45 counts of child sex abuse.

"We based the outlook revision on our assessment of the financial uncertainty associated with pending litigation and related expenses regarding the Sandusky scandal," said S&P credit analyst Blake Cullimore in a statement.

The rating agency added it could reinstate a stable outlook for the university within two years if it achieves a resolution to the litigation that minimally affects its operations.

(Reporting By Karen Pierog; Editing by Eric Walsh)