During the fourth quarter of 2023 (Oct. 1-Dec. 31), S&P Global Ratings changed its rating or revised the outlook on 11 U.S. charter schools, while eight new ratings were assigned, and 47 ratings were maintained across the sector. The 19 rating actions are broken out as follows.
S&P Global Ratings took five positive rating actions during the fourth quarter, raising one rating and revising four outlooks to positive. These actions were mostly spurred by sustained trends of improvements in key financial metrics, including strengthened operating margins and growing liquidity, supported by favorable state per-pupil funding trends and enrollment increases.
We took six negative rating actions during the quarter, consisting of five downgrades and one outlook revision to stable from positive. These negative actions were a result of steady enrollment declines and pressured financial operations, which led to deteriorating maximum annual debt service coverage, lower days' cash on hand, and in certain cases, technical covenant violations.
In addition to the positive and negative rating actions, S&P Global Ratings added eight new public charter school ratings in the fourth quarter. The new issuers spanned across the country, as ratings were added in six different states: Arkansas, California, Florida, Idaho, North Carolina, and Texas.
The following tables summarize S&P Global Ratings' quarterly rating actions, outlook revisions, and unchanged ratings for U.S. charter schools. The rating actions, outlook revisions, and unchanged ratings are based on our "U.S. Public Finance Charter Schools: Methodology And Assumptions" criteria, published Jan. 3, 2017.
Table 1
Fourth-quarter 2023 U.S. charter schools rating actions | |||||||
---|---|---|---|---|---|---|---|
Institution | State | Rating to | Rating from | Outlook to | Outlook from | Rating action | Description |
Amigos Por Vida Friends for Life Charter School | TX | BBB- | - | Stable | - | Rating initially assigned | New rating |
Cesar Chavez Academy | MI | BBB- | BB+ | Stable | Stable | Rating raised | Sizable enrollment base, growing cash position, and improving operating margins |
Freedom Academy | AZ | BB | BB+ | Negative | Rating lowered | Steady enrollment declines and full accural operating deficit in fiscal 2023 | |
Friendship Aspire Academies | AR | BB | - | Stable | - | Rating initially assigned | New rating |
Harbor Springs Charter Schools | CA | BB+ | - | Stable | - | Rating initially assigned | New rating |
Heritage Community Charter School | ID | BB+ | - | Stable | - | Rating initially assigned | New rating |
Hope Community Academy | MN | B- | BB- | Negative | CreditWatch Negative | Rating lowered | Continued detoriation in operating performance and sharp liquidity declines |
KIPP Miami | FL | BB | - | Stable | - | Rating initially assigned | New rating |
Nova Academy | TX | BB- | BB | Negative | Rating lowered | Steady enrollment declines and negative operations for two consecutive fiscal years | |
Revolution Academy | NC | BB | - | Stable | - | Rating initially assigned | New rating |
St. Paul Conservatory for Performing Arts | MN | BB- | BB | Negative | Stable | Rating lowered | Steady enrollment declines leading to pressured financial performance |
True North Classical Academy | FL | BB | - | Stable | - | Rating initially assigned | New rating |
Urban Academy of Greater Pittsburgh | PA | BB | BB+ | Stable | - | Rating lowered | Weakened operating performance and declining liquidity |
Yu Ming Charter School | CA | BB+ | - | Stable | - | Rating initially assigned | New rating |
Table 2
Fourth-quarter 2023 U.S. charter schools outlook revisions | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Institution | State | Rating | Outlook to | Outlook from | Description | |||||||
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 | |||||||
Odyssey Preparatory Academy | AZ | BB- | Stable | Positive | Weakened MADS coverage and projected deficit operations in fiscal 2024 | |||||||
Universal Learning Academy | MI | BB+ | Positive | Stable | Significant improvements in financial performance and growing liquidity | |||||||
Wayside Schools | TX | BB | Positive | Stable | Improving demand profile and solid financial metrics | |||||||
MADS--Maximum annual debt service. |
Table 3
Fourth-quarter 2023 U.S. charter schools maintained ratings | |||
---|---|---|---|
Institution | State | Rating | Outlook |
Academy of Accelerated Learning | TX | BBB- | Stable |
Albuquerque School of Excellence | NM | BB | Stable |
American Leadership Academy | UT | BBB | Stable |
Arizona School for the Arts | AZ | BB+ | Stable |
Aspire Public Schools | CA | BBB | Stable |
Avon Grove Charter School | PA | BBB- | Stable |
Blackstone Valley Prep | RI | BB+ | Stable |
Brookside Charter School | MO | BB | Stable |
Candeo Schools | AZ | BBB- | Stable |
Carolina International Schools | NC | BB+ | Stable |
Charter School for Applied Technologies | NY | BBB | Stable |
Choice Academies | AZ | BB | Stable |
Citizens of the World Charter Schools - Los Angeles | CA | BB- | Stable |
College Achieve Paterson Charter School | NJ | BB+ | Stable |
Coral Academy of Science - Las Vegas | NV | BBB- | Stable |
Eagle Advantage Schools | TX | BB+ | Stable |
Eagle Ridge Academy | CO | BBB- | Stable |
Explore Knowledge Foundation | NV | BB+ | Stable |
Flagstaff Academy | CO | BBB- | Stable |
Global Concepts Charter School | NY | BBB+ | Stable |
Kaizen Education Foundation | AZ | BB | Stable |
KIPP Bay Area Schools | CA | BBB | Stable |
Lakes International Language Academy | MN | BB+ | Stable |
Landmark Academy | MI | BB | Stable |
Liberty Charter School | ID | BBB+ | Stable |
Literacy First Charter School | CA | BBB- | Stable |
Manatee School for the Arts | FL | BBB- | Stable |
Michigan Mathematics and Science Academy | MI | BB+ | Stable |
Nova Classical Academy | MN | BB+ | Stable |
NYOS Charter School | TX | BB | Stable |
Pensar Academy | AZ | BB- | Stable |
Pinecrest Academy of Nevada | NV | BB+ | Stable |
Plymouth Educational Center Charter School | MI | D | N/A |
Prairie Seeds Academy | MN | BB- | Stable |
River Charter Schools | CA | BB | Stable |
Sarasota School of Arts and Sciences | FL | BBB- | Stable |
School Lane Charter School | PA | BBB- | Stable |
Star International Academy | MI | BBB | Stable |
Summit Academy | UT | BBB- | Stable |
Summit Academy North | MI | BB | Stable |
The Classical Academies | CA | BBB- | Stable |
The Classical Academy | CO | BBB | Stable |
The Palmdale Aerospace Academy | CA | BB | Stable |
Tulsa Honor Academy | OK | BB | Stable |
Universal Academy | MI | BBB- | Stable |
Winfree Academy Charter Schools | TX | BB- | Stable |
Yinghua Academy | MN | BB+ | Stable |
Related Research
- 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 Rating Actions, Third-Quarter 2023, Oct. 13, 2023
- U.S. Charter Schools Rating Actions, Second-Quarter 2023, July 18, 2023
- U.S. Charter Schools Sector Fiscal 2022 Medians: Schools Hold Strong Amid Rising Costs, June 14, 2023
- U.S. Charter Schools Rating Actions, First-Quarter 2023, April 18, 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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