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U.S. Charter Schools Rating Actions, 2023

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U.S. Charter Schools Rating Actions, 2023

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

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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