In 2023, S&P Global Ratings took an almost equal number of positive and negative rating actions on U.S. charter schools. We raised 11 ratings and lowered 12. Similarly, we had an almost equal number of positive outlook revisions (12) and negative revisions (11). These actions reflect a sector that remains stable due to increasing demand and healthy funding levels for kindergarten-to-grade-12 education. Downgrades outpaced upgrades for the first time since 2020; however, we note that 2021 and 2022 had the lowest number of downgrades since 2012, in part due to the significant emergency federal stimulus funding that charter schools received.
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Table 1
Charter schools new ratings assigned | |||
---|---|---|---|
Institution | State | Rating | Outlook |
Academy of Accelerated Learning | TX | BBB- | Stable |
Amigos Por Vida | TX | BBB- | Stable |
Camino Nuevo Charter Academy | CA | BBB- | Stable |
Classical Charter Schools | NY | BBB- | Stable |
DREAM Education Corp. | NY | BB+ | Stable |
Friendship Aspire Academies | AR | BB | Stable |
Harbor Springs Charter Schools | CA | BB+ | Stable |
Heritage Community Charter School | ID | BB+ | Stable |
KIPP Miami | FL | BB | Stable |
Odyssey Charter School | DE | BBB- | Stable |
Renaissance Arts Academy | CA | BBB- | Stable |
Revolution Academy | NC | BB | Stable |
STEM Preparatory Schools Inc. | CA | BBB- | Stable |
True North Classical Academy | FL | BB | Stable |
Unity Preparatory Charter School of Brooklyn | NY | BB | Stable |
Yu Ming Charter School | CA | BB+ | Stable |
Table 2
Charter schools ratings raised | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Institution | State | Rating to | Rating from | Outlook to | Outlook from | Description | ||||||||
Cesar Chavez Academy | MI | BBB- | BB+ | Stable | Stable | Sizable enrollment base, growing cash position, and improving operating margins. | ||||||||
Detroit Service Learning Academy | MI | BB | BB- | Positive | Stable | Sustained trend of solid operating margins and coverage as well as growing liquidity. | ||||||||
Doral Academy of Nevada* | NV | BBB- | BB+ | Stable | Stable | Solid MADS coverage, liquidity, and positive enrollment trend in recent years. | ||||||||
GreatHearts Arizona | AZ | BBB | BBB- | Stable | Positive | Sustained trend of good operating results, coverage, and liquidity growth, coupled with a sizable and increasing enrollment base. | ||||||||
Harmony Public Schools | TX | BBB+ | BBB | Stable | Stable | Exceptional demand profile, robust enrollment base, moderating debt burden, and sustained growth in financial metrics. | ||||||||
Littleton Preparatory Charter School | CO | BBB- | BB+ | Stable | Stable | Improved financial metrics with consistent margins, DCOH, and strengthening MADS coverage. | ||||||||
Loveland Classical Schools | CO | BBB- | BB+ | Stable | Stable | Healthy financial performance and growing liquidity position, coupled with clarity on financing plans for an upcoming expansion project. | ||||||||
Renaissance Public School Academy | MI | BB+ | BB | Stable | Stable | Material improvement in the school's financial position in fiscal years 2021 and 2022. | ||||||||
Saginaw Preparatory Academy | MI | B+ | B | Stable | Stable | Notable improvement in enrollment and academics, combined with trend of positive operations and good MADS coverage. | ||||||||
Value Schools | CA | BBB- | BB+ | Stable | Stable | Material growth in reserves along with strong demand and the successful opening of its newest campus. | ||||||||
Wasatch Peak Academy | UT | BBB- | BB+ | Stable | Positive | Improved operating margins, MADS coverage, and liquidity. | ||||||||
MADS--Maximum annual debt service. DCOH--Days' cash on hand.*Upgrade includes ratings on series 2020 (Pebble campus project), series 2019 (Fire Mesa and Red Rock campus project), and series 2017 (Cactus and Saddle campuses) bonds. |
Table 3
Charter schools ratings lowered | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Institution | State | Rating to | Rating from | Outlook to | Outlook from | Description | ||||||||
Crossroads Charter Academy | MI | B | B+ | Negative | Stable | Deterioration in demand profile from continued trend of enrollment declines. | ||||||||
Freedom Academy | AZ | BB | BB+ | Negative | Stable | Steady enrollment declines and full accural operating deficit in fiscal 2023. | ||||||||
Golden Rule Schools Inc. | TX | BB+ | BBB- | Stable | Stable | Softening demand and weakened financial profile, with declining liquidity, slim margin,s and thin MADS coverage, which are expected to continue in fiscal 2023. | ||||||||
Hope Community Academy | MN | B- | BB- | Negative | CW Negative | Continued detoriation in operating performance and sharp liquidity declines. | ||||||||
Monticello Academy | UT | BB+ | BBB- | Stable | Negative | Modest operating performance and weakened liquidity metrics. | ||||||||
Nova Academy | TX | BB- | BB | Negative | Negative | Steady enrollment declines and negative operations for two consecutive fiscal years. | ||||||||
Palmetto Scholars Academy | SC | BB | BB+ | Negative | CreditWatch negative | Deterioration in operating performance leading to a DSC violation. | ||||||||
Pointe Schools§ | AZ | CC | B | Negative | Stable | Forbearance agreement, surrender of charter, and transitioning operations of two schools to a different charter school. | ||||||||
River Heights Academy* | MI | CC | B- | Negative | Negative | RHA's intent and agreement with bondholders to miss its May 1, 2023 interest payment. | ||||||||
South Bronx Charter School For International Cultures And The Arts | NY | BB | BB+ | Negative | Negative | Additional debt with elevated pro forma debt metrics and weakening pro forma MADS coverage. | ||||||||
St. Paul Conservatory for Performing Arts | MN | BB- | BB | Negative | Stable | Steady enrollment declines leading to pressured financial performance. | ||||||||
Urban Academy of Greater Pittsburgh | PA | BB | BB+ | Stable | Stable | Weakened operating performance and declining liquidity position. | ||||||||
MADS--Maximum annual debt service. DCOH--Days' cash on hand. DSC--Debt service coverage. *The rating for River Heights Academy has since been withdrawn following a subsequent downgrade that occurred when we lowered the rating to 'D' (default). §The rating for Pointe Schools has since been withdrawn following a subsequent downgrade that occurred when we lowered the rating to 'D' (default). |
As discussed in "Outlook For U.S. Charter Schools 2024 Outlook: Credit Stability, For Now," published Jan. 17, 2024, on RatingsDirect, demand remains solid, with charter school enrollment increasing compared with that of traditional public schools over the past three years. Although charter schools continue to face wage pressures and labor shortages, remaining emergency federal stimulus funding that can be spent through September 2024 is helping to mitigate these factors, bolstering liquidity among the schools we rate. We will be monitoring closely any potential budget gaps for schools, as emergency federal stimulus funding runs out in September; and overall funding levels for charter schools in the near term.
Table 4
Charter schools outlook revisions | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Institution | State | Rating | Outlook to | Outlook from | Description | |||||||
Achievement First Rhode Island | RI | BB+ | Negative | Stable | Weakened liquidity ratios and lean lease-adjusted MADS coverage. | |||||||
American Charter Schools Foundation | AZ | BB+ | Positive | Stable | Improved operating performance and liquidity metrics. | |||||||
Aspen Ridge Preparatory School | CO | BB | Positive | Stable | Improved financial performance, growing liquidity, and increasing enrollment. | |||||||
Bay Haven Charter Academy Inc. | FL | BBB | Positive | Stable | Sustained trend of improved operating performance and healthy liquidity position. | |||||||
Chandler Park Academy | MI | BBB- | Negative | Stable | Deteriorating financial and liquidity metrics, combined with a trend of decreasing enrollment. | |||||||
Chester Charter Scholars Academy Charter School | PA | BB+ | Positive | Stable | Multiyear trend of improved operating margins, MADS coverage, and liquidity position. | |||||||
Educational Properties TCGIS LLC | MN | BB | Negative | Stable | Deterioration in financial performance, resulting in a DSC violation. | |||||||
Hmong College Prep Academy | MN | BB+ | Stable | Negative | Successful transition to a new authorizer, improved financial metrics, and significant progress made on resolving multiple investigations regarding an impermissible invesment made in 2019. | |||||||
Hope Community Academy | MN | BB- | CW Negative | Stable | Persistent weakening in underlying financial metrics, resulting in a potential DSC covenant violation for fiscal 2023. | |||||||
KIPP Jacksonville | FL | BBB- | Negative | Stable | Material decline in liquidity, and weakened financial performance. | |||||||
Liberty Common Charter School | CO | BBB- | Stable | Positive | Diminished operating performance stemming from expansion-related costs for a new leased campus facility. | |||||||
Noah Webster Basic Schools | AZ | BB | Negative | Stable | Deterioration in demand profile from continued enrollment declines. | |||||||
Odyssey Preparatory Academy | AZ | BB- | Stable | Positive | Weakened MADS coverage and projected deficit operations in fiscal 2024. | |||||||
Propel Charter Schools - Braddock Hills | PA | BB+ | Stable | Negative | Reduced charter authorization risk with recent five-year charter renewal. | |||||||
Quest Academy | UT | BBB- | Positive | Stable | Multiyear trend of improved operating margins, MADS coverage, and sound demand profile. | |||||||
SkyView Academy | CO | BB | Positive | Stable | Improvements in enrollment, operating performance, and cash levels. | |||||||
Tapestry Charter School | NY | BB+ | Stable | Positive | Greater-than-expected drawdown related to ongoing capital projects resulting in somewhat weakened balance-sheet metrics, including DCOH. | |||||||
Twin Cities Academy | MN | BB | Stable | Negative | Positive enrollment trends reversing previous declines, with increases in state aid supporting stable financial performance. | |||||||
Twin Peaks Charter Academy | CO | BB | Stable | Negative | Material improvements in enrollment, reserves, and operations, which are expected to be sustained. | |||||||
Universal Academy (LTTS Charter School Inc.) | TX | BB- | Negative | Stable | Unexpected declines in enrollment and aggressive expansion strategy, which could pressures margins and coverage. | |||||||
Universal Learning Academy | MI | BB+ | Positive | Stable | Significant improvements in financial performance and growing liquidity position. | |||||||
Voyageur Academy | MI | B+ | Stable | Positive | Expected weakening of reserves due to spending of available cash in fiscal years 2024 and 2025 to finance capital improvements. | |||||||
Wayside Schools | TX | BB | Positive | Stable | Improving demand profile and solid financial metrics. | |||||||
MADS--Maximum annual debt service. DCOH--Days' cash on hand. DSC--Debt service coverage. |
Table 5
Charter schools maintained ratings | ||||||||
---|---|---|---|---|---|---|---|---|
Institution | State | Rating | Outlook | |||||
A+ Charter School Inc. | TX | BBB- | Stable | |||||
Aspira of Delaware Inc. | DE | BB | Stable | |||||
Braination Inc. | TX | BBB- | Stable | |||||
Charter School of Educational Excellence | NY | BB | Stable | |||||
Choices In Learning Elementary Charter School | FL | BBB- | Stable | |||||
Cityscape Schools Inc. | TX | BBB- | Stable | |||||
Eagle Ridge Academy | MN | BB+ | Stable | |||||
Early Light Academy | UT | BB | Stable | |||||
Friends Of Teaneck Community Charter School | NJ | BB | Stable | |||||
Higher Ground Academy | MN | BB+ | Stable | |||||
Holly Academy | MI | BB+ | Stable | |||||
Idaho Arts Charter School | ID | BBB- | Stable | |||||
Jubilee Academic Center Inc. | TX | BB+ | Stable | |||||
KIPP DC | DC | BBB+ | Stable | |||||
KIPP SoCal Public Schools | CA | BBB | Stable | |||||
Lawndale Educational and Regional Network Charter School | IL | BBB | Stable | |||||
Legacy Preparatory Academy | UT | BBB- | Stable | |||||
Lincoln Academy | UT | BBB- | Stable | |||||
Loveland Classical Schools | CO | BB+ | Stable | |||||
Milwaukee Academy of Science | WI | BBB- | Stable | |||||
Mission Achievement and Success Charter School | NM | BB | Stable | |||||
Monument Academy | CO | BB | Negative | |||||
Mountain Island Charter School Inc. | NC | BBB- | Stable | |||||
New Branches Charter Academy | MI | BB- | Stable | |||||
New Designs Charter School | CA | BB+ | Stable | |||||
New Millennium Academy | MN | B | Stable | |||||
New Vision Charter School | CO | BBB- | Stable | |||||
North Star Academy | CO | BBB- | Stable | |||||
Odyssey Academy Inc. | TX | BB | Stable | |||||
Penn Hills Charter School of Entrepreneurship | PA | BB | Stable | |||||
Philadelphia Electrical And Technology Charter High School | PA | BB | Stable | |||||
Platte River Academy Charter School | CO | BBB- | Stable | |||||
Ronald Wilson Reagan Academy | UT | BB | Stable | |||||
Seven Generations Charter Schools | PA | BB | Stable | |||||
South Bronx Charter School for International Cultures & the Arts | NY | BB+ | Negative | |||||
Syracuse Arts Academy | UT | BBB- | Stable | |||||
University Laboratory School | CO | BBB- | Stable | |||||
Uplift Education Inc. | TX | BBB- | Stable | |||||
Urban Discovery Academy | CA | BB- | Stable | |||||
Village Tech Schools | TX | BB | Stable | |||||
Alma del Mar Charter School | MA | BB | Stable | |||||
Arizona Agribusiness and Equine Center | AZ | BB+ | Stable | |||||
Ben Franklin Academy | CO | BBB- | Stable | |||||
Center for Academic Success Inc. | AZ | BBB | Stable | |||||
Compass Public Scharter School | ID | BB | Stable | |||||
Conner Creek Academy East | MI | B | Stable | |||||
DaVinci Academy of Science & the Arts | UT | BBB- | Stable | |||||
DCS Montessori Charter School | CO | BBB- | Stable | |||||
Eleanor Kolitz Hebrew Language Academy | TX | BBB- | Stable | |||||
Equitas Academy Charter School | CA | BB+ | Stable | |||||
Friendship Public Charter School Inc. | DC | BBB | Stable | |||||
Hmong American Peace Academy | WI | BBB | Stable | |||||
Karl G. Maeser Preparatory Academy | UT | BBB- | Stable | |||||
KIPP Texas | TX | BBB+ | Stable | |||||
Life School of Dallas | TX | BBB- | Stable | |||||
Lincoln Academy Charter School | CO | BBB- | Stable | |||||
MPM Sherman Way LLC (Magnolia Public Schools) | CA | BB | Stable | |||||
North Star Academy | UT | BBB- | Stable | |||||
Odyssey Academy Inc. | TX | BB | Stable | |||||
Orenda Education | TX | BBB- | Stable | |||||
Paradise Schools | AZ | BB+ | Stable | |||||
PUC Schools | CA | BB+ | Stable | |||||
Richfield Public School Academy | MI | BBB- | Stable | |||||
Sage International School of Boise | ID | BB+ | Stable | |||||
Santa Rosa Academy | CA | BB+ | Stable | |||||
Southwest Preparatory School | TX | BB+ | Stable | |||||
Tacony Academy Charter School | PA | BB+ | Stable | |||||
Value Schools | CA | BBB- | Stable | |||||
Villa Montessori | AZ | BBB- | Stable | |||||
Vista Charter Public Schools* | CA | BB | Stable | |||||
Western Academy Charter School | FL | BB | Stable | |||||
Arlington Classics Academy | TX | BBB- | Stable | |||||
Austin Achieve Public Schools | TX | BBB- | Stable | |||||
Berean Academy | AZ | BB | Stable | |||||
Bright Star Schools | CA | BB+ | Stable | |||||
District of Columbia International School | DC | BBB | Stable | |||||
Edkey Inc. | AZ | BB- | Stable | |||||
Environmental Charter Schools | CA | BB+ | Stable | |||||
Fenton Charter Public Schools | CA | BB+ | Stable | |||||
Flint Michigan International Academy | MI | BB | Stable | |||||
Founders Classical Academy of Las Vegas | NV | BB- | Stable | |||||
Frontier Academy | CO | BBB- | Stable | |||||
George Washington Academy | UT | BBB- | Stable | |||||
Global Community Charter School | NY | BB+ | Stable | |||||
Green Woods Charter School | PA | BB+ | Stable | |||||
Grow Public Schools | CA | BB+ | Stable | |||||
Independence Academy | CO | BBB- | Stable | |||||
Inspired Teaching Demonstration Public Charter School | DC | BBB | Stable | |||||
Itineris Early College High School | UT | BB | Stable | |||||
Julian Charter School | CA | B+ | Stable | |||||
King Chavez Academies | CA | BB+ | Stable | |||||
KIPP Capital Region Public Charter Schools | NY | BBB- | Stable | |||||
Lakeview Academy | UT | BBB- | Stable | |||||
Latin American Montessori Bilingual Public Charter School | DC | BB+ | Stable | |||||
Lee County Charter Schools | FL | BB | Stable | |||||
Legacy Traditional Schools | AZ | BB+ | Positive | |||||
Noble Network of Charter Schools | IL | BBB | Stable | |||||
Ogden Preparatory Academy | UT | BBB- | Stable | |||||
Old Redford Academy | MI | BB- | Stable | |||||
Paramount School of Excellence | IN | BB+ | Stable | |||||
Parnassus Preparatory School | MN | BB+ | Stable | |||||
Philadelphia Performing Arts Charter School | PA | BB+ | Stable | |||||
Riverwalk Education Foundation | TX | BBB- | Stable | |||||
Scuola Vita Nuova Charter School | MO | BB+ | Positive | |||||
Spectrum High School | MN | BB+ | Stable | |||||
St. Paul High School for Recording Arts | MN | B | Stable | |||||
Tipton Academy | MI | BB | Stable | |||||
Trillium Academy | MI | BB | Stable | |||||
Trinity Basin Preparatory | TX | BBB | Stable | |||||
Xavier Public Charter School | ID | BBB | Stable | |||||
Winfree Academy Charter Schools | TX | BB- | Stable | |||||
Kaizen Education Foundation | AZ | BB | Stable | |||||
School Lane Charter School | PA | BBB- | Stable | |||||
Charter School for Applied Technologies | NY | BBB | Stable | |||||
Academy of Accelerated Learning | TX | BBB- | Stable | |||||
Eagle Advantage Schools | TX | BB+ | Stable | |||||
Brookside Charter School | MO | BB | Stable | |||||
Citizens of the World Charter Schools - Los Angeles | CA | BB- | Stable | |||||
The Classical Academy | CO | BBB | Stable | |||||
Global Concepts Charter School | NY | BBB+ | Stable | |||||
Arizona School for the Arts | AZ | BB+ | Stable | |||||
Liberty Charter School | ID | BBB+ | Stable | |||||
Sarasota School of Arts and Sciences | FL | BBB- | Stable | |||||
Michigan Mathematics and Science Academy | MI | BB+ | Stable | |||||
Lakes International Language Academy | MN | BB+ | Stable | |||||
College Achieve Paterson Charter School | NJ | BB+ | Stable | |||||
Pensar Academy | AZ | BB- | Stable | |||||
Plymouth Educational Center Charter School | MI | D | N/A | |||||
Summit Academy | UT | BBB- | Stable | |||||
NYOS Charter School | TX | BB | Stable | |||||
Explore Knowledge Foundation | NV | BB+ | Stable | |||||
River Charter Schools | CA | BB | Stable | |||||
Landmark Academy | MI | BB | Stable | |||||
KIPP Bay Area Schools | CA | BBB | Stable | |||||
Carolina International Schools | NC | BB+ | Stable | |||||
The Classical Academies | CA | BBB- | Stable | |||||
The Palmdale Aerospace Academy | CA | BB | Stable | |||||
Prairie Seeds Academy | MN | BB- | Stable | |||||
Coral Academy of Science - Las Vegas | NV | BBB- | Stable | |||||
Pinecrest Academy of Nevada | NV | BB+ | Stable | |||||
Eagle Ridge Academy | CO | BBB- | Stable | |||||
Aspire Public Schools | CA | BBB | Stable | |||||
Literacy First Charter School | CA | BBB- | Stable | |||||
Tulsa Honor Academy | OK | BB | Stable | |||||
Nova Classical Academy | MN | BB+ | Stable | |||||
Flagstaff Academy | CO | BBB- | Stable | |||||
Choice Academies | AZ | BB | Stable | |||||
Universal Academy | MI | BBB- | Stable | |||||
Candeo Schools | AZ | BBB- | Stable | |||||
American Leadership Academy | UT | BBB | Stable | |||||
Manatee School for the Arts | FL | BBB- | Stable | |||||
Albuquerque School of Excellence | NM | BB | Stable | |||||
Star International Academy | MI | BBB | Stable | |||||
Summit Academy North | MI | BB | Stable | |||||
Yinghua Academy | MN | BB+ | Stable | |||||
Avon Grove Charter School | PA | BBB- | Stable | |||||
Blackstone Valley Prep | RI | BB+ | Stable | |||||
*Rating includes the debt from both series 2014 (middle school campus) and series 2021 (Condor & Heritage campuses) bonds. |
Related Research
- Outlook For U.S. Charter Schools 2024 Outlook: Credit Stability, For Now, Jan. 17, 2024
- U.S. Charter Schools Rating Actions, Fourth-Quarter 2023, Jan. 12, 2024
- U.S. Local Governments 2024 Outlook: Stimulus Shelters Governments In 2024; Preventing Long-Term Leaks Requires Fiscal Focus Now, Jan. 9, 2024
- U.S. States 2024 Outlook: Credit Stability Endures In Unstable Times, Jan. 4, 2024
- U.S. Public Finance 2023 Year In Review: Better Than Expected, Dec. 12, 2023
- Economic Outlook U.S. Q1 2024: Cooling Off But Not Breaking, Nov. 27, 2023
- U.S. Charter Schools Sector Fiscal 2022 Medians: Schools Hold Strong Amid Rising Costs, June 14, 2023
This report does not constitute a rating action.
Primary Credit Analysts: | Jessica L Wood, Chicago + 1 (312) 233 7004; jessica.wood@spglobal.com |
Avani K Parikh, Phoenix + 1 (212) 438 1133; avani.parikh@spglobal.com | |
Secondary Contact: | Ryan Miller, Dallas +1 2148711408; ryan.miller@spglobal.com |
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