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U.S. Charter School Rating Actions, Fourth-Quarter 2024

During the fourth quarter of 2024 (Oct. 1-Dec. 31), S&P Global Ratings changed its rating or revised the outlook on 18 U.S. charter schools, while assigning five new ratings and maintaining 37 ratings across the sector. The rating actions are broken out as follows:

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S&P Global Ratings took 10 positive rating actions by raising three ratings, revising four outlooks to positive from stable, and revising three outlooks to stable from negative during the quarter. These actions mostly reflected our view of sustained trends of improved financial performance, including stronger operating margins and growing liquidity, amid maintenance of solid enrollment and sound demand profiles.

We took eight negative rating actions by lowering three ratings and revising five outlooks to negative. These actions were primarily a result of persisting enrollment declines and more modest operating results, which led to deteriorating maximum annual debt service coverage, lower liquidity, and, in some instances, missed interest payments or technical covenant violations, triggering heighted uncertainty regarding potential bondholder actions.

In addition to the rating actions and outlook revisions described above, S&P Global Ratings assigned five new charter school ratings: three in California and one each in New Jersey and New York. For the full year, S&P Global Ratings assigned 21 new charter school ratings, reflecting a sector that continues to grow.

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

Table 1

Fourth-quarter 2024: U.S. charter schools rating actions
Institution State Rating Outlook Rating action Description
To From To From
Chester Charter Scholars Academy PA BBB- BB+ Stable Positive Rating raised Continued trend of healthier operating margins and stronger lease-adjusted MADS coverage
Edkey, Inc. AZ D BB+ Watch Neg Watch Neg Rating lowered Sharp enrollment declines and recent action by majority bondholders, after an informal agreement with Edkey management, to direct the trustee to refrain from making its scheduled Dec. 1, 2024, interest payment on its parity debt outstanding
Ednovate Schools CA BB+ - Stable - Rating initially assigned New rating
Foundation Academy Charter School NJ BB+ BBB- Stable Stable Rating lowered Increased debt burden and expectations of more modest operating results following the issuance of series 2024 debt
Integrity Charter School CA BB- - Stable - Rating initially assigned New rating
Quest Academy UT BBB BBB- Stable Positive Rating raised Continued trend of healthier operating margins and stronger lease-adjusted MADS coverage
Real Journey Academies Inc. CA BB+ - Stable - Rating initially assigned New rating
Saginaw Preparatory Academy MI BB- B+ Stable Stable Rating raised Consistent enrollment growth and stability in the new management team, resulting in improved operating results
St. Paul Conservatory for Performing Arts MN B+ BB- Negative Negative Rating lowered Declining enrollment and a smaller operating base, which leave the school's financial results more susceptible to unexpected enrollment fluctuations
Success Academy Charter School NY A- - Stable - Rating initially assigned New rating
The Community Charter School Of Paterson NJ BB+ - Stable - Rating initially assigned New rating
MADS--Maximum annual debt service.

Table 2

Fourth-quarter 2024: U.S. charter school outlook revisions
Institution State Rating Outlook Description
To From
21st Century Charter School Of Gary IN B+ Watch Pos Watch Dev Resolution of the series 2013 bond covenants, including an added payment guarantee from GEO Foundation, the school's charter management organization
Achievement First Rhode Island RI BB+ Stable Negative Strengthening demand profile leading to improved financial metrics and healthier MADS coverage
Austin Achieve Public Schools TX BBB- Negative Stable Weakening financial metrics with expectations of continued operating pressures in fiscal 2025 as a result of flat state funding
Berean Academy AZ BB Negative Stable Four years of consecutive enrollment declines leading to uncertainty surrounding future operating performance
District of Columbia International School DC BBB Positive Stable Enrollment growth resulting in stronger operating results and improved financial metrics
Hope Community Academy MN B- Stable Negative Improved financial results such that the school was in compliance with bond covenants in fiscal 2024, with expectations that compliance will continue in fiscal 2025
Monticello Academy UT BB+ Negative Stable Weakened liquidity metrics and operating performance in fiscal 2023 resulting in a DSC covenant violation
Penn Hills Charter School of Entrepreneurship PA BB Negative Stable Deteriorating full-accrual operating results and moderating liquidity postion
Pinecrest Academy Of Nevada NV BB+ Positive Stable Robust enrollment growth translating to a more manageable debt burden
Scuola Vita Nuova Charter School MO BB+ Stable Positive Enrollment declines that will likely translate to more modest financial performance in the near term
Tipton Academy MI BB Positive Stable Improving margins and lease-adjusted MADS coverage and strengthening liquidity position
Twin Cities German Immersion School MN BB Stable Negative Improved financial results such that the school was in compliance with bond covenants in fiscal 2024, with expectations that compliance will continue in fiscal 2025
DSC--Debt service coverage. MADS--Maximum annual debt service.

Table 3

Fourth-quarter 2024: U.S. charter schools maintained ratings
Institution State Rating Outlook
Alliance for College-Ready Public Schools CA BBB Stable
Chandler Park Academy MI BBB- Negative
Choices in Learning Elementary Charter School FL BBB- Stable
Cornerstone Charter Academy NC BBB- Stable
Environmental Charter Schools CA BB+ Stable
George Washington Academy UT BBB- Stable
Global Concepts Charter School NY BBB+ Stable
Golden Rule Charter School TX BB+ Stable
Green Woods Charter School PA BB+ Stable
Inspired Teaching Demonstration Public Charter School DC BBB Stable
International Academy of Flint MI BB Stable
Jubilee Academic Center TX BB+ Stable
Karl G. Maeser Preparatory Academy UT BBB- Stable
KIPP Texas TX BBB+ Stable
Lakes International Language Academy MN BB+ Stable
Las Americas ASPIRA Academy DE BB Stable
Latin American Montessori Bilingual Public Charter School DC BB+ Stable
Lee County Charter Schools FL BB Stable
Liberty Charter School ID BBB+ Stable
Liberty Common Charter School CO BBB- Stable
Littleton Preparatory Charter School CO BBB- Stable
Michigan Math & Science Academy MI BB+ Stable
New Vision Charter School CO BBB- Stable
Noble Network of Charter Schools IL BBB Stable
North Star Academy UT BBB- Stable
Odyssey Charter School DE BBB- Stable
Orenda Education TX BBB- Stable
Paradise Schools AZ BB+ Stable
Paramount School Of Excellence IN BB+ Stable
Pinecrest Academy, Inc. FL BBB Stable
Renaissance Academy Charter School PA BBB- Stable
Sarasota School of Arts & Sciences FL BBB- Stable
The Elevate Academy, Inc. ID BB Stable
Trillium Academy MI BB Stable
Villa Montessori, Inc. AZ BBB- Stable
Voyageur Academy MI B+ Stable
Xavier Public Charter School ID BBB Stable

This report does not constitute a rating action.

Primary Credit Analyst:Ryan Miller, Dallas +1 2148711408;
ryan.miller@spglobal.com
Secondary Contacts:Jessica L Wood, Chicago + 1 (312) 233 7004;
jessica.wood@spglobal.com
Luke J Gildner, Columbia + 1 (303) 721 4124;
luke.gildner@spglobal.com

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