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U.S. Charter Schools Rating Actions, Fourth-Quarter 2023

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U.S. Charter Schools Rating Actions, Fourth-Quarter 2023

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.

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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

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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