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U.S. Charter Schools Rating Actions, Third-Quarter 2020


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U.S. Charter Schools Rating Actions, Third-Quarter 2020

During the third quarter of 2020 (July 1-Sept. 30), S&P Global Ratings changed its rating or revised its outlook on 13 charter schools (six of these ratings were initially assigned) while maintaining 32 ratings.

Most rating and outlook changes in the quarter were the result of enrollment declines and weakening financial performance. There were four outlook or rating changes either directly or indirectly driven by COVID-19. Five out of the seven ratings changes were downgrades, or a negative outlook being assigned; however, there was one upgrade in the quarter based on a successful charter renewal. The remaining issuer's outlook was revised to negative, from CreditWatch negative, also based on a charter renewal. No positive outlooks were assigned in the quarter.

On Sept. 3, 2020, S&P Global Ratings highlighted several risk factors related to COVID-19 that could affect both charter and traditional public schools (see "Credit FAQ: How COVID-19 And The Recession Could Affect Credit Quality For U.S. K-14 Schools," published Sept. 3, 2020). These factors include state revenue pressure, operating cost increases, federal stimulus uncertainty, fluctuating enrollment, and an uneven economic recovery. Material per-pupil funding cuts could create operating challenges for those charter schools with less financial flexibility and weaker reserve levels. Additionally, specifically for charter schools, event risk and state policy changes could have a negative impact on the sector. Each of these credit risks will be important as we continue to assess the credit quality of our charter school ratings and the sector at large.

The following tables summarize S&P Global Ratings' quarterly rating actions, outlook revisions, and maintained ratings for U.S. charter schools. The rating actions, outlook revisions, and maintained ratings are based on our "U.S. Public Finance Charter Schools: Methodology And Assumptions" criteria, published Jan. 3, 2017.

Table 1

U.S Charter School Rating Actions And Outlook Revisions, Third Quarter 2020
Org Name State Rating To Rating From Outlook To Outlook From Rating Action Description

Pensar Academy Inc.

AZ BB- Stable Rating initially assigned New rating

Children of Promise Preparatory Academy

CA CC CCC+ Negative Negative Rating lowered Default likely; school ceased operations on June 30, 2020, but paid trustee the July 1, 2020, payment on time and in full

Twin Peaks Charter Academy

CO BB BB+ Stable Negative Rating lowered;outlook revised to stable Weakening demand profile and financial performance could pressure weakened MADS coverage and high burden

Dayspring Academy for Education and Arts

FL BB Stable Rating initially assigned New rating

Mater Academy, Inc.

FL BBB Stable Rating initially assigned New rating

Chandler Park Academy

MI BBB- BBB- Negative Stable Rating maintained; outlook revised to negative COVID-19, recessionary pressures, and per-pupil funding cuts could impact fiscal 2021 and beyond

Saginaw Preparatory Academy

MI B B Negative Watch Neg Rating maintained; removed from creditwatch Removed from CreditWatch due to two-year charter renewal; still faces an elevated risk of charter revocation given school's shorter charter term

New Millennium Academy

MN B B- Stable Stable Rating raised Four-year charter renewal alleviates prior risk of charter nonrenewal

St. Paul Conservatory for Performing Artists

MN BB BB+ Stable Negative Rating lowered; outlook revised to stable Continued enrollment decline and negative full accrual financial operations could lead to additional weakening of school's market position

Twin Cities Academy

MN BB BB Negative Stable Rating maintained; outlook revised to negative Enrollment decline has weakened lease-adjusted MADS coverage in fiscal 2019 and likely fiscal 2020

Founders Academy of Las Vegas

NV BB- Stable Rating initially assigned New rating

Public Preparatory Charter Schools Academies

NY BB+ Stable Rating initially assigned New rating

Southwest Preparatory School

TX BB+ Stable Rating initially assigned New rating

Table 2

U.S. Charter Schools Ratings Maintained, Third Quarter 2020
Org Name State Rating Outlook

Arizona School for the Arts

AZ BB+ Stable

Horizon Community Learning Center

AZ BB+ Negative

Odyssey Preparatory Academy

AZ BB- Stable

Aspire Public Schools

CA BBB Negative

Classical Academy, Inc.

CA BB+ Stable

KIPP SoCal Public Schools

CA BBB Stable

River Charter Schools

CA BB Stable

Urban Discovery Academy

CA BB- Stable

District of Columbia International School

DC BBB Stable

Discovery Charter School

IN BB- Stable

Flint International Academy

MI BB Negative

Grand Traverse Academy

MI BB Stable

Old Redford Academy

MI BB- Negative

Hmong Education Reform Company

MN BB+ Stable

Kaleidoscope Charter School

MN BB- Stable

Pine Lake Preparatory

NC BB+ Stable

LEAP Academy University Charter School

NJ BB- Stable

North Star Academy Charter School

NJ BBB- Stable

Doral Academy of Nevada

NV BB+ Stable

Mater Academy of Nevada

NV BB Stable

Nevada Charter Academies, d/b/a Amplus Academy

NV BB Stable

Pinecrest Academy of Nevada

NV BB+ Negative

Riverhead Charter School

NY BBB- Stable

South Bronx Charter School for International Cultures & the Arts

NY BB+ Stable

A+ Charter School Inc

TX BBB- Stable

KIPP Texas, Inc.

TX BBB+ Stable

Leadership Preparatory School

TX BB Stable

Uplift Education

TX BBB- Stable

Channing Hall Charter School

UT BB Stable

Early Light Academy

UT BB Stable

Summit Academy

UT BBB- Stable

Syracuse Arts Academy

UT BBB- Stable

Related Research

This report does not constitute a rating action.

Primary Credit Analyst:Jessica L Wood, Chicago (1) 312-233-7004;
Secondary Contacts:Peter V Murphy, New York (1) 212-438-2065;
Sylvia Miller, New York;

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