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COMMENTS

Fiscal 2018 U.S. Charter School Sector Medians: Overall, Enrollment And Financial Performance Improved


Fiscal 2018 U.S. Charter School Sector Medians: Overall, Enrollment And Financial Performance Improved

S&P Global Ratings maintains 280 bond ratings in the U.S. charter school space as of May 10, 2019. Given the proliferation of school networks in the sector, these ratings are affiliated with over 1,000 charter schools. Despite a minor uptick in the proportion of speculative-grade credits, most key financial performance and unrestricted cash median metrics improved modestly from fiscal 2017, reflecting the rated sector's stabilization and a healthy economy creating a stable to increasing per-pupil funding environment.

The Methodology Behind Our Median Calculations

S&P Global Ratings produced these medians from fiscal 2018 audited results for charter schools with public ratings based on its charter schools criteria. For organizations where our group rating methodology criteria applies, we have included financials of either the obligated group or the consolidated group, depending on which we believe are more meaningful to the rating outcome based on the relationship between the obligated group and consolidated group.

These medians are not requirements for any particular rating but rather reflect the sector's general credit trends at the specified levels. As economic conditions and the number of rated schools change, so will the reported medians. We view financial ratio analysis as important in our assessment of a charter school's credit quality. However, it is just one of many factors we assess. Our ratings encompass a variety of enterprise profile and other qualitative factors (demand and competition, academic performance, management and governance, growth plans, local area demographics, state legislatures, and charter structure) that are all key to our analysis.

Ratings Distribution

Chart 1

image

Charter school ratings currently range from 'BBB+' to 'B-' (see chart 1). Ratings have moved down slightly from the 'BBB-' and 'BB+' rating levels, while the number of 'BB' issuers increased. During the past two years, speculative-grade ratings increased by 5.7%--as of May 10, 2019, 43.9% of publicly rated charter schools were investment-grade compared with 49.6% on May 10, 2017. This follows changes in the composition of issuers in the portfolio as new ones are added, others withdrawn, and a few merged. This also reflects rating changes.

As of May 10, 2019, we had no ratings below 'B-,' though we previously had two. We downgraded one, Stride Academy, Minn., to 'D' (default) from 'CC' on April 1, 2019, after the academy missed its bond principal payment. We subsequently withdrew the rating on April 5 at the school's request. The other was Charter High School for Architecture & Design, Pa. We raised our rating on its bonds to 'B-' from 'CCC+' due to a renegotiation of its term loan and line of credit, reducing the school's contingent liquidity risk. However, the outlook remains negative, because the school continues to face charter renewal risk with its authorizer.

Outlook Distribution

The nature of the charter school sector lends itself to inherent risk and volatility, where charter nonrenewal or revocations can affect credit quality swiftly. Charter schools with a negative outlook continue to outpace those with a positive outlook and we have seen a deterioration in the outlook distribution from the prior year. As of May 10, 2019, charter schools with negative outlooks increased to 13% from 10% in the prior year, and charter schools with stable outlooks decreased to 83% from 85% in the prior year. However, as we look at median data over time the rated sector continues to stabilize and we believe metrics will remain steady overall despite some potential risks on the horizon.

Chart 2

image

How Medians Have Changed

While sectorwide medians for fiscal 2018 remained similar to results in 2016 and 2017 (see table 1), several key metrics improved. Stronger metrics include enrollment, financial performance measures such as excess margin and lease-adjusted maximum annual debt service (MADS) coverage, liquidity as measured by days' unrestricted cash on hand, and most debt ratios except debt per student. These medians also reflect changes in our portfolio composition as credits move in or out of the portfolio.

We anticipate that a meaningful change in these metrics could happen beyond fiscal year 2019 or 2020 to the extent that an economic downturn occurs and strains per-pupil funding; demographic shifts affect enrollments; or other risks such as natural disasters, school security and safety, or increased unionization affect a critical number of rated charter schools.

Table 1

Charter School Sectorwide Medians
2018 2017 2016 2015
No. of credits* 282 282 277 265
Enrollment 1,084 1,020 979 945
Waitlist (% of enrollment) 26.8 29.1 29.5 31.0
Student retention rate (%) 89.0 90.0 90.0 N.A.
EBIDA margin (%) 15.19 15.24 15.73 15.60
Excess margin (%) 3.93 3.47 3.51 3.80
Lease-adjusted MADS coverage (x) 1.40 1.36 1.38 1.40
Current MADS ($000s) 1,405 1,332 1,259 1,282
Lease-adjusted MADS burden (% of revenue) 12.1 12.4 12.7 N.A.
Days' unrestricted cash on hand 111.1 109.3 100.5 91.0
Unrestricted cash and investments to debt (%) 19.4 17.7 16.1 16.2
Unrestricted net assets (% expenses) 25.1 24.9 24.6 20.0
Debt per student ($) 14,714 14,592 14,581 13,693
State revenue per student ($) 7,432 7,253 7,205 6,976
Total expense per student ($) 9,627 9,239 9,144 8,879
Total revenue ($000s) 11,258 10,282 9,431 N.A.
Debt to capitalization (%) 85.9 87.0 87.6 89.5
*The number of credits do not equal number of ratings (280) due to ratings evaluated under Group Rating Methodology criteria. MADS--Maximum annual debt service. N.A.--Not available.

Medians By Rating

Similar to past years, we see that many financial medians generally tend to improve with credit quality (see table 2). Notable exceptions to this trend are state revenue per student and total expense per student, which do not appear to be correlated with rating level and are more likely tied to state funding or regional cost-of-living factors.

While schools with larger enrollment appear to have an advantage in the 'BBB+'/'BBB' rating space, the medians for 'BBB-' and 'BB+' enrollment levels are about the same. Size does not determine a rating on its own, but we believe that smaller operations, particularly those below 400 students, are riskier creditwise given that they have less financial flexibility and are more susceptible to demand profile fluctuations. Most financial metrics also improve higher up the rating scale, which is in line with our expectations.

The variability in financial metric trends at the lower rating medians ('BB-' rating and the 'B' category) is due to the significantly smaller sample size within these categories; and many of the factors behind the rating at this level stemming from problems in the enterprise profile, or one particularly strained issue in the financial profile.

Table 2

Fiscal 2018 Charter School Medians By Rating
BBB+/BBB BBB- BB+ BB BB- B+/B/B-
No. of credits 31 94 63 58 17 19
Enrollment 2,354 1,098 1,147 956 824 979
Waiting list as (% of enrollment) 51.3 35.3 18.5 22.6 1.4 0
Student retention rate (%) 91.4 91.5 90 87 86 75
EBIDA margin (%) 15.78 15.75 14.92 14.28 12.65 13.78
Excess margin (%) 6.34 5.44 3.40 2.30 0.19 1.67
Lease-adjusted MADS coverage (x) 1.87 1.58 1.38 1.18 1.16 1.26
Current MADS ($000s) 2,153 1,244 1,686 1,324 1,285 1,414
Lease-adjusted MADS burden (% of revenue) 8.4 11.1 13.1 13.6 14.8 13.5
Days' unrestricted cash on hand 181.8 146.8 102 72 53.1 38.7
Unrestricted cash and investments to debt (%) 42.6 25.9 16.9 11.9 12 8.4
Unrestricted net assets (% expenses) 60 31.7 24.9 17.2 5.6 8
Debt per student ($) 11,482 13,975 15,524 16,811 13,400 15,474
State revenue per student ($) 7,591 7,180 7,594 7,259 7,950 7,576
Total expense per student ($) 9,591 9,106 10,188 9,238 9,336 10,795
Total revenue ($000s) 25,383 10,832 13,409 9,039 10,404 9,981
Debt to capitalization (%) 67.7 83.6 85.8 91.4 94.7 95.2
MADS--Maximum annual debt service.

Medians Based On Three-Year Averages

This year, we have included median data based on each credit's three-year-average metrics (see table 3). Because most credits' metrics vary from year to year, the average offers a smoothed view of operating performance and liquidity measures. We calculate the averages for each credit based on audited fiscal years 2016-2018 figures, then take the medians of those averages.

Enrollment for charter schools of higher credit quality generally either remained stable or increased in fiscal 2018, while declines are more prevalent among schools of lower credit quality (below 'BB'), where fiscal 2018 medians are below the three-year-average medians. The enrollment growth has reduced waitlists, which was lower for the fiscal 2018 median at nearly all rating levels.

For 'B' category ratings, financial performance is typically distressed. This leads to more uneven results and greater swings in excess margin and lease-adjusted MADS coverage year over year, shown in the larger deviations between the fiscal 2018 median and the median three-year-average. The 'B' category's negative three-year-average excess margin shows that results for issuers in this category are worse over a three-year basis, despite fiscal 2018's positive median. The smaller sample size could also explain the greater variance compared with the medians of other rating levels.

Days' unrestricted cash on hand has improved over the past three years for 'BBB-', 'BB+', and 'BB' rated credits, and the fiscal 2018 median is above the three-year-average median. This trend is a confluence of many factors, including school site or grade-level expansions, movement toward liquidity targets that many schools forecast in their projections, and improved funding of public education by nearly all charter school states in recent years supported by a favorable economic environment.

Statistically, differences between the fiscal 2018 and three-year-average medians do not necessarily indicate that the data for all individual credits vary in the same direction. Instead, we have made broad interpretations of what the median data might indicate, combined with our empirical observations of sector trends through our experience working with individual credits.

Table 3

Three-Year-Average Medians By Ratings
BBB+/BBB BBB- BB+ BB BB- B+/B/B-
No. of credits 31 94 63 58 17 19
Enrollment 2,354 1,098 1,147 956 824 979
Three-year-average enrollment 2,272 1,052 1,067 874 875 980
Waitlist (% enrollment) 51.3 35.3 18.5 22.6 1.4 0
Three-year-average waitlist (% enrollment) 49.8 41.0 23.2 30.0 2.8 1.3
EBIDA margin (%) 15.78 15.75 14.92 14.28 12.65 13.78
Three-year-average EBIDA margin (%) 16.66 16.42 15.07 13.76 15.15 13.16
Excess margin (%) 6.34 5.44 3.40 2.30 0.19 1.67
Three-year-average excess margin (%) 7.14 4.64 4.08 1.85 1.71 (1.53)
Lease adjusted MADS coverage (x) 1.87 1.58 1.38 1.18 1.16 1.26
Three-year-average lease adjusted MADS coverage (x) 2.05 1.59 1.37 1.20 1.16 1.08
Days' unrestricted cash on hand 181.8 146.8 102.0 72.0 53.1 38.7
Three-year-average days' unrestricted cash on hand 184.2 145.3 91.2 66.1 60.6 42.4
MADS--Maximum annual debt service.

Medians By States

Our coverage of charter school public ratings spans 25 states (see chart 3). California and Texas continue to have the largest number of publicly rated charter school credits. Also, some states have large charter school networks with multiple schools supporting a single rating. This results in larger enrollment, operating bases, and total revenue medians. Chart 3 reflects the number of obligated groups issuing rated debt, and not the number of schools or networks.

Chart 3

image

Table 4 provides medians for states where we have at least 20 ratings.

  • Consistent since fiscal 2016, Pennsylvania and Minnesota have the highest cost per student and Utah has the lowest. Supported by plentiful facilities funding from the state's lease aid, Minnesota has the highest debt per student, followed by Pennsylvania, which directly relates to their greater expenses.
  • Utah and Colorado schools have the lowest expense per student, partially due to lower costs of financing through their state credit enhancement programs, and also relatively higher excess margins, lease adjusted MADS coverage, and unrestricted cash ratios.
  • Texas and Arizona schools also have pooled credit enhancement programs that lower the cost of financing, and exhibit relatively lower expense per student.
  • Michigan schools have the lowest median rating, tied to its relatively low median for unrestricted cash levels, lease-adjusted MADS coverage, and excess margins compared with those from other states. In addition, Michigan statute limits the use of per-pupil funding on debt service to 20%, and many charter schools in the state are relatively small in our opinion, serving high-needs students in low socioeconomic areas with waning populations.

For further state-specific information, please see our Charter Brief reports on Colorado, California, Pennsylvania, Texas, and Michigan.

Table 4

Charter School Medians By State
Arizona California Colorado Michigan Minnesota Pennsylvania Texas Utah
No. of credits 21 32 29 28 24 23 31 30
Median rating BB+ BB+ BBB- BB BB+ BB+ BB+ BBB-
Enrollment 1,667 1,714 896 811 745 1,066 1,647 991
Waitlist (% enrollment) 10.8 17.9 27.9 0.0 17.8 84.7 26.5 34.7
Student retention rate (%) 88.1 93.0 90.4 84.5 90.0 91.0 87.4 87.0
EBIDA margin (%) 16.44 9.96 16.23 12.49 14.13 11.80 16.32 21.41
Excess margin (%) 1.55 4.03 4.81 1.70 1.70 5.42 4.08 6.86
Lease-adjusted MADS coverage (x) 1.20 1.38 1.40 1.27 1.31 1.59 1.45 1.60
Current MADS ($000s) 2,366 2,375 907 935 1,128 1,665 2,079 898
Lease-adjusted MADS burden (% revenue) 15.8 10.6 12.2 11.5 12.6 10.4 12.6 13.6
Days' unrestricted cash on hand 107.8 99.8 157.5 60.2 101.2 125.5 96.6 141.5
Unrestricted cash and investments to debt (%) 15.2 28.7 22.4 12.5 16.2 18.2 19.7 19.0
Unrestricted net assets (% expenses) 14.9 39.4 26.9 22.0 28.6 24.7 14.8 28.1
Debt per student ($) 14,544 13,294 13,559 10,853 22,865 18,339 14,067 14,741
State revenue per student ($) 6,811 9,622 6,987 7,534 7,942 12,718 8,724 6,887
Total expense per student ($) 8,464 12,021 8,170 9,621 13,005 13,920 9,603 7,226
Total revenue ($000s) 14,101 19,994 6,964 7,499 9,491 15,759 18,168 7,119
Debt to capitalization (%) 89.5 73.2 86.8 86.3 87.4 85.8 90.5 88.2
MADS--Maximum annual debt service.

Medians By Authorizer Type

This year, we have included a break-out of medians by authorizer type (see table 5). Based on the medians, charter schools with a state or local agency authorizer have slightly more favorable excess margins, coverage, days' unrestricted cash on hand, and debt-to-capitalization, when compared with charter schools authorized by other authorizer types. We believe the large number of credits from more charter-friendly states with state agency authorizers such as Arizona, Colorado, Texas, and Utah help improve these medians. In addition, the median differentials between school district-authorized credits and university, college, and other non-profit organization-authorized credits are not as pronounced.

In our view, differences at the state level determine much of the statutory framework and the resulting disparities in metrics, demonstrated by the sharp contrasts between some state medians. These differences are exacerbated in states facing weakening school-age demographics. For example, while both Pennsylvania and Colorado have school district authorizers, Pennsylvania charter schools tend to see more adversarial school district authorizers with heightened conflicts of interest due to diminishing student age demographics--for instance, Allegheny and Delaware Counties have projected five-year school age population declines of 3.8% and 1.8%, respectively. We also believe a lack of clarity in the state law regarding the renewal process further hinders the relationship and charter standing. This contrasts with the friendlier charter environment in Colorado, where per-pupil state funding and population rates, such as Denver's projected 5.5%, are increasing; relationships with school district authorizers remain amicable; and additional property tax mill levies are shared with charter schools.

Table 5

Charter School Medians By Authorizer
State or local agency School district University, college, and other not-for-profits
No. of credits 127 97 58
Enrollment 1,108 1,002 1,075
Waitlist (% enrollment) 27.1 28.2 22.4
Student retention rate (%) 90.0 89.0 89.0
EBIDA margin (%) 15.55 15.95 14.59
Excess margin (%) 4.15 3.57 3.27
Lease-adjusted MADS coverage (x) 1.46 1.38 1.39
Current MADS (000's) 1,293 1,415 1,531
Lease adjusted MADS burden (% revenue) 11.7 12.7 12.1
Days' unrestricted cash on hand 117.1 103.4 99.6
Unrestricted cash investments to debt (%) 20.6 18.5 17.1
Unrestricted net assets (% expenses) 27.5 24.0 17.3
Debt per student ($) 14,401 13,934 16,012
State revenue per student ($) 7,392 7,197 8,023
Total expense per student ($) 9,603 9,363 10,448
Total revenue ($000s) 11,248 10,850 11,785
Debt to capitalization (%) 84.9 87.0 88.7
MADS--Maximum annual debt service.

What We're Watching

We believe these fiscal 2018 financial medians support our stable outlook for the rated sector in 2019. While the number of charter schools across the nation continues to increase, albeit more slowly than in prior years, the number of new schools requesting a public rating has declined due to alternative financing options. We expect the number of rated schools to be stable, so we anticipate the financial medians in fiscal 2019 will be similar to the fiscal 2018 medians. Several bills currently in play in various states could affect rated charter schools in many ways. Beyond fiscal 2019, we will continue to monitor potential risks across the sector, such as evolving legislation, increasing competition for students amid changing demographics, a possible economic slowdown accompanied by reductions in per-pupil funding, shifts in labor relations, and rising pension expenses.

Table 6

Charter School Ratings By Category As Of May 10, 2019
State Rating Outlook
BBB+

Peak to Peak Charter School - Prairie View Inc.

CO BBB+ Stable

KIPP DC

DC BBB+ Stable

Newark Charter School, Inc.

DE BBB+ Stable

Global Concepts Charter School

NY BBB+ Stable

Idea Public Schools

TX BBB+ Stable

KIPP Texas, Inc.

TX BBB+ Stable
BBB

Center for Academic Success, Inc.

AZ BBB Stable

Alliance for College - Ready Public Schools - Series 2015, 2016, 2019 Obligated Group

CA BBB Stable

Alliance for College - Ready Public Schools - Gertz-Ressler Richard Merkin 6-12 Complex

CA BBB Negative

Aspire Public Schools

CA BBB Stable

KIPP SoCal Public Schools

CA BBB Stable

Castle Rock Lifelong Learning Center

CO BBB Negative

Classical Academy Charter School

CO BBB Stable

Flagstaff Academy

CO BBB Stable

Independence Academy

CO BBB Stable

Littleton Academy Charter School

CO BBB Stable

Woodrow Wilson Academy Charter School

CO BBB Stable

Friendship Public Charter School, Inc.

DC BBB Stable

Bay Haven Charter Academy, Inc.

FL BBB Stable

Pinecrest Academy, Inc.

FL BBB Stable

Liberty Charter School, Nampa

ID BBB Stable

Xavier Public Charter School

ID BBB Stable

Chicago Charter School Foundation

IL BBB Stable

Noble Network of Charter Schools

IL BBB Stable

Star International Academy

MI BBB Stable

TEAM Academy (Ashland School)

NJ BBB Stable

Harmony Public Schools

TX BBB Stable

Responsive Education Solutions

TX BBB Stable

Hawthorn Academy

UT BBB Stable

Navigator Pointe Academy

UT BBB Stable
BBB-

Candeo Schools, Inc.

AZ BBB- Stable

GreatHearts Arizona

AZ BBB- Stable

Harvest Preparatory Academy

AZ BBB- Stable

Villa Montessori, Inc.

AZ BBB- Stable

Alliance for College - Ready Public Schools - Patti & Peter Neuwirth Leadership Academy

CA BBB- Stable

American Heritage Education Foundation

CA BBB- Stable

Coastal Academy Charter School Inc.

CA BBB- Stable

Granada Hills Charter School

CA BBB- Stable

Green Dot Public Schools

CA BBB- Positive

Literacy First Charter School

CA BBB- Stable

Ben Franklin Academy

CO BBB- Stable

Cheyenne Mountain Charter Academy

CO BBB- Negative

DCS Montessori Charter School

CO BBB- Stable

Excel Academy Charter School

CO BBB- Positive

Frontier Academy

CO BBB- Stable

Liberty Common Charter School

CO BBB- Stable

Lincoln Academy Charter School

CO BBB- Stable

North Star Academy

CO BBB- Stable

Pinnacle Charter School

CO BBB- Stable

Platte River Academy Charter School

CO BBB- Stable

University Laboratory School

CO BBB- Stable

Campus Community School

DE BBB- Stable

Delaware Military Academy

DE BBB- Stable

Cornerstone Schools

FL BBB- Stable

Doral Academy Inc.

FL BBB- Stable

Sarasota School of Arts & Sciences

FL BBB- Stable

Sculptor Charter School

FL BBB- Stable

DeKalb Academy of Technology & Environment

GA BBB- Positive

Idaho Arts Charter School

ID BBB- Stable

Victory Charter School

ID BBB- Positive

Foxborough Regional Charter School

MA BBB- Stable

Sabis International Charter School

MA BBB- Stable

Chandler Park Academy

MI BBB- Stable

Creative Montessori Academy

MI BBB- Negative

Holly Academy

MI BBB- Negative

Oakland International Academy

MI BBB- Stable

Richfield Public School Academy

MI BBB- Stable

Community of Peace Academy

MN BBB- Stable

Higher Ground Academy

MN BBB- Negative

Math & Science Academy Building Company

MN BBB- Stable

Nova Classical Academy

MN BBB- Stable

PACT Charter School

MN BBB- Stable

Spectrum High School

MN BBB- Negative

Lake Norman Charter School

NC BBB- Stable

Mountain Island Charter School, Inc.

NC BBB- Stable

Thomas Jefferson Classical Academy

NC BBB- Stable

Foundation Academy Charter School

NJ BBB- Stable

North Star Academy

NJ BBB- Stable

Coral Academy of Science-Las Vegas

NV BBB- Stable

Explore Knowledge Foundation

NV BBB- Stable

Bronx Charter School for Excellence

NY BBB- Stable

Charter School for Applied Technologies

NY BBB- Positive

Riverhead Charter School

NY BBB- Stable

Avon Grove Charter School

PA BBB- Stable

MaST Community Charter School

PA BBB- Stable

New Foundations Charter School

PA BBB- Stable

Propel Charter School - East

PA BBB- Negative

Propel Charter School - McKeesport

PA BBB- Negative

Propel Charter School - Montour

PA BBB- Negative

Renaissance Academy Charter School

PA BBB- Stable

School Lane Charter School

PA BBB- Stable

A+ Charter School Inc.

TX BBB- Stable

Arlington Classics Academy

TX BBB- Stable

Braination, Inc.

TX BBB- Stable

Eagle Advantage Schools, Inc.

TX BBB- Stable

Golden Rule School, Inc.

TX BBB- Stable

Life School of Dallas

TX BBB- Stable

New Frontiers Public Schools

TX BBB- Negative

Orenda Education

TX BBB- Stable

Riverwalk Education Foundation Inc.

TX BBB- Stable

Ser-Ninos, Inc.

TX BBB- Stable

Uplift Education

TX BBB- Stable

American Leadership Academy

UT BBB- Positive

DaVinci Academy of Science & the Arts

UT BBB- Stable

George Washington Academy

UT BBB- Stable

Karl G. Maeser Preparatory Academy

UT BBB- Stable

Lakeview Academy

UT BBB- Stable

Legacy Preparatory Academy

UT BBB- Stable

Lincoln Academy

UT BBB- Stable

Monticello Academy

UT BBB- Stable

Mountainville Academy

UT BBB- Stable

Noah Webster Academy

UT BBB- Stable

North Davis Preparatory Academy

UT BBB- Stable

North Star Academy

UT BBB- Stable

Ogden Preparatory Academy

UT BBB- Stable

Providence Hall

UT BBB- Stable

Quest Academy

UT BBB- Stable

Summit Academy

UT BBB- Stable

Syracuse Arts Academy

UT BBB- Stable

Utah Charter Academies, Inc.

UT BBB- Stable

Venture Academy

UT BBB- Stable

Vista at Entrada Charter School

UT BBB- Stable

Milwaukee Academy of Science

WI BBB- Stable
BB+

American Charter Schools Foundation

AZ BB+ Stable

Arizona Agribusiness & Equine Center Inc.

AZ BB+ Negative

Eagle South Mountain Property

AZ BB+ Stable

Freedom Academy

AZ BB+ Stable

Horizon Community Learning Center

AZ BB+ Stable

Kaizen Education Foundation

AZ BB+ Stable

Paradise Education Center

AZ BB+ Stable

Children of Promise Preparatory Academy

CA BB+ Stable

Classical Academy, Inc.

CA BB+ Stable

Grimmway Schools

CA BB+ Stable

King Chavez Academies

CA BB+ Stable

New Designs Charter School

CA BB+ Negative

Rocklin Academy

CA BB+ Positive

Santa Rosa Academy Inc.

CA BB+ Stable

Value Schools

CA BB+ Stable

Vista Charter Middle School

CA BB+ Stable

Community Leadership Academy

CO BB+ Stable

Eagle Ridge Academy Inc.

CO BB+ Stable

Littleton Preparatory Charter School

CO BB+ Stable

Monument Academy

CO BB+ Stable

STEM School and Academy

CO BB+ Stable

Twin Peaks Charter Academy

CO BB+ Stable

ASPIRA of Delaware Charter Operations, Inc.

DE BB+ Negative

Acero Charter School Inc.

IL BB+ Stable

Cesar Chavez Academy

MI BB+ Stable

Renaissance Public School Academy

MI BB+ Negative

Universal Academy

MI BB+ Stable

Universal Learning Academy

MI BB+ Stable

Cologne Academy

MN BB+ Stable

Duluth Edison Charter Schools (Tischer Creek Duluth Building Co.)

MN BB+ Stable

Eagle Ridge Academy

MN BB+ Stable

Educational Properties TCGIS, LLC

MN BB+ Stable

Hmong Education Reform Co.

MN BB+ Stable

Lakes International Language Academy

MN BB+ Stable

Noble Academy

MN BB+ Stable

St. Croix Preparatory Academy

MN BB+ Stable

St. Paul Conservatory for Performing Arts

MN BB+ Negative

Yinghua Academy

MN BB+ Stable

Allen Village School

MO BB+ Stable

Carolina International School

NC BB+ Stable

Pine Lake Preparatory

NC BB+ Stable

Doral Academy of Nevada - Fire Mesa & Red Rock Campus Series 2019A

NV BB+ Stable

Doral Academy of Nevada - Saddle & Cactus Series 2017

NV BB+ Stable

Pinecrest Academy of Nevada

NV BB+ Stable

Charter School of Educational Excellence

NY BB+ Negative

South Bronx Charter School for International Cultures & the Arts

NY BB+ Stable

Tapestry Charter School

NY BB+ Stable

Collegium Charter School

PA BB+ Stable

Discovery Charter School

PA BB+ Negative

First Philadelphia Preparatory Charter School

PA BB+ Stable

Independence Charter School

PA BB+ Stable

KIPP Philadelphia Charter School

PA BB+ Stable

Propel Charter School - Braddock Hills

PA BB+ Negative

Tacony Academy Charter School

PA BB+ Stable

The Chester Fund for Education and the Arts

PA BB+ Stable

Cityscape Schools Inc.

TX BB+ Stable

Faith Family Charter School

TX BB+ Stable

Meridian World School

TX BB+ Stable

Wayside Schools

TX BB+ Stable

Entheos Academy

UT BB+ Stable

Spectrum Academy

UT BB+ Negative

Wasatch Peak Academy

UT BB+ Stable
BB

Academies of Math and Science

AZ BB Negative

BASIS Schools Inc.

AZ BB Stable

Choice Academies, Inc.

AZ BB Stable

Noah Webster Basic Schools, Inc.

AZ BB Stable

ICEF Public School - Series 2013 High School

CA BB Stable

ICEF Public School - Series 2014 Elementary & Middle School

CA BB Stable

John Adams Academies Inc.

CA BB Negative

MPM Sherman Way LLC

CA BB Stable

Nova Academy

CA BB Stable

Palmdale Aerospace Academy (The)

CA BB Stable

Partnerships to Uplift Communities - Series 2014 Obligated Group

CA BB Stable

Partnerships to Uplift Communities - Series 2012 Obligated Group

CA BB Stable

River Charter Schools

CA BB Stable

River Springs Charter School

CA BB Stable

Aspen Ridge Preparatory School

CO BB Stable

Loveland Classical Schools

CO BB Stable

SkyView Academy

CO BB Stable

Odyssey Charter Schools, Inc.

FL BB Stable

Terrace Community Middle School

FL BB Stable

Compass Public Charter School

ID BB Negative

Avondale Meadows Academy

IN BB Stable

Patterson Park Public Charter School

MD BB Stable

Advanced Tech Academy

MI BB Stable

Dr. Joseph F. Pollack Academic Center of Excellence

MI BB Stable

Flint International Academy

MI BB Negative

Grand Traverse Academy

MI BB Stable

Hanley International Academy

MI BB Stable

Saginaw Preparatory Academy

MI BB Negative

Summit Academy North

MI BB Stable

Trillium Academy

MI BB Stable

Academia Cesar Chavez

MN BB Stable

Hope Community Academy

MN BB Stable

Kaleidoscope Charter School

MN BB Stable

Parnassus Preparatory School

MN BB Stable

Twin Cities Academy

MN BB Stable

Friends of Teaneck Community Charter School

NJ BB Stable

Mater Academy of Nevada

NV BB Stable

Nevada Charter Academies, d/b/a American Preparatory Academy- Las Vegas

NV BB Stable

Somerset Academy of Las Vegas - Series 2015 and 2018 Obligated Group

NV BB Stable

Somerset Academy of Las Vegas - Series 2019 Lone Mountain

NV BB Stable

Global Leadership Academy Charter School

PA BB Negative

Green Woods Charter School

PA BB Stable

Mariana Bracetti Academy Charter School

PA BB Stable

Philadelphia Performing Arts Charter School

PA BB Stable

West Philadelphia Achievement Charter Elementary School

PA BB Stable

Palmetto Scholars Academy

SC BB Positive

A.W. Brown Fellowship Charter School

TX BB Stable

Albuquerque School of Excellence (Charter School Solutions, TX)

NM BB Stable

Compass Academy Charter School Inc.

TX BB Stable

Jubilee Academic Center Inc.

TX BB Stable

Leadership Preparatory School

TX BB Stable

Nova Academy

TX BB Stable

Odyssey Academy, Inc.

TX BB Stable

Channing Hall Charter School

UT BB Stable

Early Light Academy

UT BB Stable

Paradigm High School

UT BB Stable

Ronald Wilson Reagan Academy

UT BB Stable

Salt Lake Arts Academy

UT BB Stable
BB-

Career Success Schools

AZ BB- Stable

Edkey Inc.

AZ BB- Stable

Albert Einstein Academies

CA BB- Positive

Urban Discovery Academy

CA BB- Stable

Collegiate Academy Charter School

CO BB- Stable

Lee County Charter Schools

FL BB- Stable

Discovery Charter School

IN BB- Stable

Crossroads Charter Academy

MI BB- Stable

Landmark Academy

MI BB- Stable

New Branches Charter Academy

MI BB- Stable

Old Redford Academy

MI BB- Negative

Prairie Seeds Academy

MN BB- Negative

LEAP Academy University Charter School

NJ BB- Negative

Paterson Charter School for Science & Technology

NJ BB- Stable

School of Excellence in Education

TX BB- Stable

Texas Leadership Charter Academy

TX BB- Stable

Winfree Academy Charter Schools

TX BB- Stable
B+ and lower

Pointe Educational Services

AZ B+ Negative

Julian Charter School

CA B+ Negative

21st Century Charter School

IN B+ Stable

Summit Academy

MI B+ Stable

Universal Academy (LTTS Charter School, Inc.)

TX B+ Stable

ASPIRA of Florida, Inc

FL B Negative

Thea Bowman Leadership Academy

IN B Stable

Conner Creek Academy East

MI B Stable

Detroit Service Learning Academy

MI B Stable

High School for Recording Arts

MN B Stable

Tejano Center for Community Concerns, Inc.

TX B Stable

Rocky Mountain Academy of Evergreen

CO B- Stable

Cesar Chavez Public Charter School

DC B- Negative

Detroit Community Schools

MI B- Negative

Plymouth Educational Center Charter School

MI B- Negative

Voyageur Academy

MI B- Stable

New Millennium Academy

MN B- Stable

Charter High School for Architecture & Design

PA B- Negative

Evolution Academy Charter School

TX B- Positive

Table 7

Charter School Ratios And Terms
Debt per student Total debt/enrollment
Debt to capitalization (%) [Long-term debt/(unrestricted net assets + long-term debt)] x 100
EBIDA ($000s) Net income before interest, depreciation, and amortization expenses. Generally includes reconciling adjustments to account for differences in reporting under GASB and FASB standards.
EBIDA margin (%) (EBIDA / total revenue) x 100
Excess margin (%) [(Total revenues - total expenses)/total revenues)] x 100
Total expense per student Total expense/enrollment
Lease-adjusted MADS burden (%) [(MADS + operating lease expense) / total revenues] x 100
Lease-adjusted MADS coverage (Net revenue available for debt service + operating lease expense) / (MADS + operating lease expense)
MADS ($000s) The greatest annual debt service, when including principal and interest payments on all obligated and non-obligated group debt, including long-term bonds, capital leases, mortgages, and bank debt. For variable-rate debt, we generally assume a 3.5% interest rate. For draws on lines of credit and commercial paper, assume the actual fixed rate or a 3.5% variable interest rate with principal payments spread over 30 years. Debt guaranteed for a third party is included at 100% if the guarantor has made any payments over the past five years, or the guaranteed entity is generating less than 1x coverage of its MADS. Variable-rate debt swapped to fixed should be run at the swap rate
State revenue per student Total state revenue reported on statement of activities/enrollment
Total revenue Total operating revenue + net nonoperating revenue
Days' unrestricted cash on hand Unrestricted reserves / [(total expenses - depreciation and amortization expense) / 365)].
Unrestricted net assets as % of expense Net assets excluding any restricted items. Generally includes reconciling adjustments to account for differences in reporting under GASB and FASB standards.
Unrestricted reserves to debt (%) (Unrestricted reserves / total long-term debt) x 100
Unrestricted reserves Unrestricted cash, unrestricted investments, unrestricted board designated. Excluded from unrestricted reserves are debt service funds, donor restricted amounts, funds designated for pension, temporarily or permanently restricted funds, receivables, and other funds that are legally restricted. Generally included in unrestricted reserves are exceptional deferrals of state funding when we determine there has been an established record of payment in full and cash balances have been artificially suppressed at year-end.
MADS--Maximum annual debt service.

This report does not constitute a rating action.

Primary Credit Analysts:Kaiti Wang, CFA, New York 212-438-0566;
kaiti.wang@spglobal.com
Robert Tu, CFA, San Francisco (1) 415-371-5087;
robert.tu@spglobal.com
Secondary Contacts:Jessica L Wood, Chicago (1) 312-233-7004;
jessica.wood@spglobal.com
Peter V Murphy, New York (1) 212-438-2065;
peter.murphy@spglobal.com
Research Assistants:Natalie L Fakelmann, Chicago
Arpita Ray, Mumbai
Alix Charles, New York

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