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Sustaining Penn’s Aa2 Long-term Debt Rating with Moody’s
April 13, 2010, Volume 56, No. 29

Citing the University of Pennsylvania’s strong student demand and yield, good progress on its current Making History $3.5 billion fundraising campaign and robust research funding, Moody’s Investor Service has reaffirmed Penn’s Aa2 rating with a stable outlook.

“We’re very pleased,” said Stephen D. Golding, Penn’s vice president for finance and treasurer. “In continuing this rating, Moody’s also took note of our solid balance sheet and sustained operating performance. Given the financial challenges of the past two years, this is quite encouraging.”

Moody’s said the University’s “healthy level of financial resources provides considerable flexibility, despite recent reductions.”
The analysts also noted that Penn’s strengths lie in its research enterprise, with direct expenditures totaling $601 million in fiscal year 2009 and with significant increases in sponsored awards this year, including federal stimulus grants. They praised the University’s 17.6 percent undergraduate acceptance rate and a 61.6 percent yield rate on accepted applicants and called Penn’s annual gift revenue of $353 million “impressive.”

The Aa2 rating applies to Penn’s revenue bonds issued through the Pennsylvania Higher Educational Facilities Authority as well as its As2/VMIG 1 ratings on a variable rate series of 2004 revenue bonds issued through the Washington County, PA, Authority.

Penn has sustained this rating since 2007, when the University was upgraded from an Aa3 rating.

Almanac - April 13, 2010, Volume 56, No. 29