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U.S. Charter Schools Rating Actions, First-Quarter 2025

During the first quarter of 2025 (January 1 to March 31), S&P Global Ratings changed its rating or revised the outlook on 20 U.S. charter schools while assigning two new ratings and maintaining 47 ratings across the sector. The rating actions are broken out as follows:

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In January, we published "U.S. Charter Schools 2025 Outlook: Stability For Now, With Pockets Of Pressure" (Jan. 22, 2025, on RatingsDirect), which highlighted factors likely to influence the charter school sector in 2025, such as how demographic trends, increased competition for students, and the expansion of voucher programs across the country could affect charter school enrollment, as well as how changes in education policy at the federal level could affect charter schools. On the financial front, state per-pupil funding has generally remained stable or grown modestly. We also published "U.S. Charter Schools Rating Actions, 2024" (Jan. 29, 2025), which outlined all rating actions in the charter school sector for 2024, wherein S&P Global downgraded twice the number of ratings (14) that it upgraded (seven) over the course of the year.

S&P Global Ratings took five positive rating actions during the quarter, raising three ratings and revising two outlooks to positive from stable. These actions mostly reflected our view of improved financial performance, including healthier excess margins and growing liquidity amid maintenance of solid enrollment and sound demand profiles.

We took 15 negative rating actions during the quarter, downgrading nine ratings, revising five outlooks to negative from stable, and revising one outlook to stable and removing it from CreditWatch with positive implications. These actions were primarily a result of persistent enrollment declines that led to full-accrual operating deficits in fiscal 2024; deteriorating maximum annual debt service coverage; lower liquidity; and, in some instances, technical covenant violations that triggered heighted uncertainty regarding potential bondholder actions.

In addition to the actions described above, S&P Global Ratings assigned two new charter school ratings, one in Illinois and the other in Utah.

The following tables summarize S&P Global Ratings' first-quarter 2025 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.

Table 1

First-Quarter 2025: U.S. charter schools rating actions
Institution State Rating to Rating from Outlook to Outlook from Rating action Description
Aspen Ridge Preparatory School CO BB+ BB Positive Positive Rating raised Improved operating performance resulting in a sustained trend of stronger MADS coverage and healthier liquidity.
Aspire Public School CA BBB- BBB Stable Stable Rating lowered Weak lease-adjusted MADS coverage and softening liquidity from already-modest levels.
Candeo Schools Inc. AZ BB+ BBB- Stable Stable Rating lowered Declining enrollment that negatively affected margins in fiscal 2024, resulting in significant budget cuts for fiscal 2025.
Crossroads Charter Academy MI B- B Negative Negative Rating lowered Persisting enrollment declines leading to two consecutive fiscal years of operating deficits, and pressured financial metrics.
Eagle Advantage Academy TX BB BB+ Stable Stable Rating lowered Continued enrollment declines and weak operating performance leading to a strategic partnetship being formalized with Village Technical Schools.
Esperanza Elementary School UT BB - Stable - Rating assigned New rating
Explore Knowledge Foundation NV BB BB+ Stable Stable Rating lowered Enrollment decreases that led to weak financial performance and declining liquidity in fiscal 2024.
Global Community Charter School NY B+ BB+ Negative Stable Rating lowered Rapid weakening of financial profile, with full-accrual operating deficits resulting in violations of DSC and DCOH covenants in fiscal 2024.
KIPP Jacksonville FL BB+ BBB- Negative Negative Rating lowered Weak operating results in fiscal 2024 and deteoriating liquidity that are expected to persist through fiscal 2025.
LEAP Academy University Charter School NJ BB BB- Stable Stable Rating raised Sustained trend of solid operating surpluses, improving MADS coverage, and consistent growth of unrestricted reserves.
MaST Community Charter School PA BBB BBB- Stable Stable Rating raised Succesfully execution of a five-year charter renewal with its authorizer, along with consistently healthy operating margins that have improved key financial metrics.
Math and Science Academy MN BB BB+ Negative Stable Rating lowered Increased leverage following new debt issuance, which negatively affected liquidity and pro forma lease-adjusted MADS coverage metics.
Northern Kane Educational Corp. IL BB+ - Stable - Rating assigned New rating
Tacony Academy Charter School PA BB BB+ Stable Stable Rating lowered Material deterioration in the school's liquidity position, and continued operation under an unexecuted charter agreement.
MADS: Maximum annual debt service. DSC: Debt service coverage. DCOH: Days' cash on hand

Table 2

First-Quarter 2025: U.S. charter schools outlook revisions
Institution State Rating Outlook to Outlook from Description
21st Century Charter School Of Gary IN B+ Stable CW Positive Finalization of series 2013 bond amendment, which includes an added payment to support debt serevice with GEO Foundation, the schools CMO.
Carolina International School NC BB+ Negative Stable Weak operating performance during fiscal 2024 that pressured key financial metrics and is expected to continue in fiscal 2025.
Freedom Preparatory Academy TN BBB- Negative Stable Shrinking enrollment that adversely affected financial performance in fiscal 2024 and could continue in fiscal 2025.
New Millennium Academy MN B Positive Stable Improved operating performance and financial metrics, including fiscal 2024 lease-adjusted MADS coverage above 1x that is expected to continue in fiscal 2025.
Odyssey Preparatory School AZ BB- Negative Stable Enrollment decreases that led to weaker financial results in fiscal 2024 and will likely cause a fiscal 2025 operating deficit.
River Springs Charter School CA BB+ CW Negative Stable Lack of timely and sufficient information to review the current rating.
The Classical Academy, Inc. CA BBB- Positive Stable Growing demand that has led to a trend of healthier MADS coverage and cash levels that are expected to be sustained.
Triad Educational Services Inc. NC BBB- Negative Stable Increased leverage and limited financial flexibilty following the issuance of new debt.
MADS: Maximum annual debt service

Table 3

First-Quarter 2025: U.S. charter schools maintained ratings
Institution State Rating Outlook
Albuquerque School of Excellence NM BB Stable
Amplus Academy NV BB+ Stable
Arizona Agribusiness AZ BB+ Stable
Arizona School for the Arts AZ BB+ Stable
Arlington Classics Academy TX BBB- Stable
Bright Star Schools CA BB+ Stable
Brighter Choice Charter Schools NY BB+ Stable
Brookside Charter School MO BB Stable
Camden Prep Foundation, Inc. NJ BBB- Stable
Center for Academic Success AZ BBB Stable
Cesar Chavez Academy MI BBB Stable
Charter School for Applied Technology NY BBB Stable
Choice Academies, Inc. AZ BB Stable
Compass Academy Charter School TX BBB- Stable
Compass Public Charter School ID BB Stable
Conner Creek Academy MI B Stable
DCS Montessori Charter School CO BBB- Stable
Detroit Service Learning Academy MI BB Positive
Doral Academy Of Nevada NV BBB- Stable
Eagle Ridge Academy MN BB+ Stable
Early Light Academy UT BB Stable
Fenton Charter Public Schools CA BB+ Stable
Fit Kids Inc. d/b/a Champion Schools AZ BB Stable
Friendship Aspire Arkansas AR BB Stable
Frontier Academy CO BBB- Stable
Heritage Community Charter School ID BB+ Stable
Hughen Center Inc. d/b/a Bob Hope School TX BBB- Stable
Karl G. Maeser Preparatory Academy UT BBB- Stable
King-Chavez Academy of Excellence CA BB+ Stable
Lakeview Academy UT BBB- Stable
Literacy First Charter Schools CA BBB- Stable
Loveland Classical Schools CO BBB- Stable
Nova Classical Academy MN BB+ Stable
Parnassus Preparatory School MN BB+ Stable
Richfield Public School Academy MI BBB- Stable
Riverwalk Education Foundation TX BBB- Stable
Santa Rosa Academy CA BB+ Stable
Southwest Preparatory School TX BB+ Stable
Summit Academy UT BBB- Stable
TEAM Academy Ashland School NJ BBB Stable
Trinity Basin Preparatory TX BBB Stable
Tulsa Honor Academy OK BB Stable
Twin Cities Academy MN BB Stable
Unity Preparatory Charter School of Brooklyn NY BB Stable
Utah Charter Academies UT BBB- Stable
Village Technical Schools TX BB Stable
Yinghua Academy MN BB+ Stable

Related Research

Economic Outlook U.S. Q2 2025: Losing Steam Amid Shifting Policies, March 25, 2025

Charter School Brief: California, March 6, 2025

Charter School Brief: Colorado, Feb. 19, 2025

U.S. Local Governments 2025 Outlook: A Stable Start To The Year While Prospects Look Precarious, Jan. 8, 2025

U.S. States 2025 Outlook: Eyes On Washington, Focus On Budgets, Jan. 7, 2025

U.S. Charter Schools Sector Fiscal 2023 Medians: Healthy Financial Metrics Amid Looming Fiscal Cliff, June 25, 2024

U.S. State Enhancement Programs And Their Impact On Charter Schools, May 7, 2024

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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