Audited Financial Statements

NEW ISSUE – BOOK ENTRY ONLY RATINGS: Standard & Poor’s: “AA” Moody’s: “Aa2” (See “RATINGS” herein) In the opinion of Bond Counsel, assuming compliance with certain covenants of the University, interest on the 2015 Bonds is excludable from gross income of the owners of the 2015 Bonds for federal income tax purposes under existing law, as currently enacted and construed. Interest on the 2015 Bonds is not an item of tax preference for purposes of either individual or corporate alternative minimum tax; however, interest on the 2015 Bonds is taken into account in determining adjusted current earnings for purposes of the corporate alternative minimum tax as more fully described under the caption “TAX MATTERS” herein. In the opinion of Bond Counsel, under the laws of the Commonwealth of Pennsylvania as presently enacted and construed, the 2015 Bonds are exempt from personal property taxes in Pennsylvania and the interest on the 2015 Bonds is exempt from Pennsylvania personal income and corporate net income tax. See “TAX MATTERS” herein. $182,165,000 THE PENNSYLVANIA STATE UNIVERSITY Bonds, Series A of 2015 - $65,210,000 Refunding Bonds, Series B of 2015 - $116,955,000 Dated: Date of Delivery Due: September 1, as shown on the inside cover page The Pennsylvania State University Bonds, Series A of 2015 (the “Series 2015A Bonds”) and The Pennsylvania State University Refunding Bonds, Series B of 2015 (the “Series 2015B Bonds” and, together with the Series 2015A Bonds, the “2015 Bonds”) are general unsecured obligations of The Pennsylvania State University (the “University”). The 2015 Bonds are issuable as fully registered bonds without coupons and, when issued, will be registered in the name of Cede & Co., as registered owner and nominee for The Depository Trust Company (“DTC”), New York, New York. DTC will act as securities depository for the 2015 Bonds. Purchases of the 2015 Bonds will be made in book-entry form. Purchasers will not receive certificates representing their beneficial ownership interest in the 2015 Bonds. Registered owners shall mean Cede & Co., as aforesaid, and shall not mean the actual purchasers of the 2015 Bonds. As long as Cede & Co. is the registered owner of the 2015 Bonds, payment will be made to the beneficial owners of the 2015 Bonds via DTC by its participants. See “BOOK- ENTRY ONLY SYSTEM” herein. Interest on the 2015 Bonds is payable initially on September 1, 2015 and semiannually thereafter on each March 1 and September 1 (each, an “Interest Payment Date”) until maturity. The 2015 Bonds are issuable only in registered form without coupons in denominations of $5,000 or any integral multiple thereof within the maturity. Interest on the 2015 Bonds will be paid by check or draft mailed, or under certain conditions paid by wire transfer, to the persons in whose names such 2015 Bonds are registered at the close of business on the fifteenth day of the month immediately preceding the applicable Interest Payment Date. Principal of the 2015 Bonds will be payable at the designated corporate trust office of The Bank of New York Mellon Trust Company, N.A., Pittsburgh, Pennsylvania, as Trustee, or at the designated corporate trust office of any successor trustee. The Series 2015A Bonds are being issued to finance (1) the acquisition, construction and equipping of two data center facilities to house computer systems and associated components, including telecommunication, storage and disaster recovery systems, one located at the Penn State University Park Campus and one located at the Penn State Hershey Campus; (2) the acquisition, construction and equipping of a student enrichment center located at the Penn State Harrisburg Campus; (3) the acquisition, construction and equipping of a housing and food service warehouse and the expansion of the bakery located at the Penn State University Park Campus; (4) other capital projects consistent with the University’s capital plan; and (5) the payment of all or a portion of the costs of issuance of the Bonds. The Series 2015B Bonds are being issue to finance (1) the current refunding of all of The Pennsylvania State University Bonds, Series 2004A and all of The Pennsylvania State University Bonds, Series 2005; and (2) the payment of all or a portion of the costs of issuance of the 2015 Bonds. THE 2015 BONDS ARE GENERAL UNSECURED OBLIGATIONS OF THE UNIVERSITY, AND ARE NOT A DEBT OF THE COMMONWEALTH OF PENNSYLVANIA OR ANY POLITICAL SUBDIVISION, AGENCY OR INSTRUMENTALITY THEREOF (OTHER THAN THE UNIVERSITY) AND ARE PAYABLE SOLELY FROM THE SOURCES REFERRED TO IN THE 2015 BONDS AS DESCRIBED HEREIN. NEITHER THE CREDIT NOR THE TAXING POWER OF THE COMMONWEALTH OF PENNSYLVANIA NOR ANY POLITICAL SUBDIVISION, AGENCY OR INSTRUMENTALITY THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OR REDEMPTION PRICE OF, OR INTEREST ON, THE 2015 BONDS. THE UNIVERSITY HAS NO TAXING POWER. The 2015 Bonds are subject to optional and mandatory sinking fund redemption prior to maturity. See “REDEMPTION” herein. The 2015 Bonds are offered, when, as and if issued and received by the Underwriters, subject to prior sale, withdrawal or modification of the offer without notice and the approval of legality by Greenberg Traurig, LLP, Philadelphia, Pennsylvania, Bond Counsel. Certain legal matters will be passed upon for the University by Stephen S. Dunham, its Vice President and General Counsel, and for the Underwriters by their counsel, Cohen & Grigsby, P.C., Pittsburgh, Pennsylvania. It is expected that the 2015 Bonds will be available for delivery through the facilities of The Depository Trust Company in New York, New York on or about June 3, 2015. BARCLAYS BofA Merrill Lynch J.P. Morgan Securities Morgan Stanley Wells Fargo Securities The date of this Official Statement is May 6, 2015. $182,165,000 THE PENNSYLVANIA STATE UNIVERSITY Bonds, Series A of 2015 - $65,210,000 Refunding Bonds, Series B of 2015 - $116,955,000 Dated: Date of Delivery Due: September 1, as shown below Interest Payable: March 1 and September 1 First Interest Payment: September 1, 2015 MATURITY SCHEDULE, INTEREST RATES, AND YIELDS SERIAL MATURITIES – SERIES 2015A Bonds Due Amount of Series September 1 2015A Bonds Interest Rate Yield 2016 $1,430,000 2.000% 0.45% 2017 1,460,000 4.000 0.83 2018 1,520,000 4.000 1.18 2019 1,580,000 5.000 1.43 2020 1,660,000 5.000 1.64 2021 1,740,000 5.000 1.87 2022 1,830,000 5.000 2.06 2023 1,920,000 5.000 2.27 2024 2,015,000 5.000 2.48 2025 2,115,000 5.000 2.58 2026 2,220,000 5.000 2.73** 2027 2,335,000 5.000 2.88** 2028 2,450,000 5.000 3.00** 2029 2,570,000 5.000 3.07** 2030 2,700,000 5.000 3.14** 2031 2,835,000 5.000 3.20** 2032 2,980,000 5.000 3.26** 2033 3,125,000 5.000 3.30** 2034 3,280,000 5.000 3.34** 2035 3,445,000 5.000 3.38** $20,000,000 5.000% Series 2015A Term Bond Due September 1, 2040, Yield 3.49%** SERIAL MATURITIES – SERIES 2015B Bonds Due Amount of September 1 Series 2015B Bonds Interest Rate Yield 2015 $5,375,000 1.000% 0.08% 2016 3,580,000 2.000 0.45 2017 3,665,000 4.000 0.83 2018 3,820,000 4.000 1.18 2019 3,975,000 5.000 1.43 2020 4,180,000 5.000 1.64 2021 4,395,000 5.000 1.87 2022 4,620,000 5.000 2.06 2023 4,860,000 5.000 2.27 2024 5,105,000 5.000 2.48 2025 5,375,000 5.000 2.58 2026 5,650,000 5.000 2.73** 2027 5,940,000 5.000 2.88** 2028 6,245,000 5.000 3.00** 2029 6,565,000 5.000 3.07** 2030 6,900,000 5.000 3.14** 2031 7,260,000 5.000 3.20** 2032 7,630,000 5.000 3.26** 2033 8,020,000 5.000 3.30** 2034 8,435,000 5.000 3.34** 2035 5,360,000 5.000 3.38** ________________________________ ** Priced to the first par call date of September 1, 2025. OFFICERS OF THE UNIVERSITY Eric J. Barron ................................................................................................................................... President Nicholas P. Jones ................................................................................ Executive Vice President and Provost David J. Gray ...................................................... Senior Vice President for Finance and Business/Treasurer A. Craig Hillemeier ...................... Senior Vice President for Health Affairs and Dean, College of Medicine Rodney P. Kirsch ......................................... Senior Vice President for Development and Alumni Relations Stephen S. Dunham …………………………………………………...Vice President and General Counsel BOND COUNSEL Greenberg Traurig, LLP Philadelphia, Pennsylvania TRUSTEE The Bank of New York Mellon Trust Company, N.A. Pittsburgh, Pennsylvania UNDERWRITERS Barclays Capital Inc. New York, New York UNDERWRITERS' COUNSEL Cohen & Grigsby, P.C. Pittsburgh, Pennsylvania FINANCIAL ADVISOR Public Financial Management, Inc. Philadelphia, Pennsylvania The information set forth herein has been obtained from the University and other sources that are believed to be reliable, but such sources are not guaranteed as to accuracy or completeness, and the information is not to be construed as a representation by the Underwriters and, except for the information concerning the University in Appendix A – Information Concerning The Pennsylvania State University and Appendix B – Audited Financial Statements of The Pennsylvania State University – Fiscal Years ended June 30, 2014 and June 30, 2013, is not to be construed as a representation by the University. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the University since the date hereof.

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