News Brief: Penn gets its highest score yet on credit

The University was awarded its highest credit rating ever by credit rating agency Standard and Poor's last month.

S&P; upgraded Penn's credit rating from an AA to AA+, the second highest rating possible, in its annual evaluation.

"It reflects favorably on our financial and institutional reputation," Vice President of Finance and Treasury Stephen Golding said. "[It] gives investors, donors and sponsors higher confidence in Penn's ability to sustain and enhance its mission."

According to Golding, S&P;'s highest attainable rating, an AAA, is typically only given to institutions with much higher endowments than Penn, like Harvard or Princeton.

Nonetheless, Golding said that the improved rating would allow the University to borrow at lower interest rates, thereby reducing its operational costs.

This upgrade closely follows January's credit rating upgrade by Moody's Investor Services, another national rating agency.

Administrators pointed to the financial successes of the University's health system, the academic reputation of the University and the stable management as the driving factors behind the higher rating.

Additionally, the upgrade reflects that Penn's financial assets - like the endowment - outweigh its liabilities - like debt.

The University will need to maintain its performance in order to keep this rating.

"We need to maintain positive financial operating results and be prudent in our investments and use of debt," among other things, Golding said.

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