Bangkok--30 Aug--Standard & Poor's
Standard & Poor's Ratings Services assigned its 'BBB-' rating, with a stable outlook, to Idaho Housing and Finance Association, Idaho's series 2010A tax-exempt nonprofit facilities revenue bonds and 2010B taxable nonprofit facilities revenue bonds. The bonds will be secured by revenues from Compass Public Charter School.
The rating reflects our view of the following credit weaknesses associated with the obligation:
As with all charter schools, the potential for the school to lose its charter prior to the bonds' maturity;
Short tenure of the school, which has operated since fiscal 2006; and Moderately competitive environment, including a charter school with a similar educational philosophy located six miles away.
The credit strengths of this obligation, in our opinion, include:
Automatic charter renewals, subject to annual review by a state commission;
Waiting list equal to 65% of total allowed students under the school's charter;
The ability to cover maximum annual debt service payments with fiscal 2010 net revenues; and
Demonstrated willingness to adjust budgets in light of state revenue pressures, including a 5% salary reduction for fiscal 2011.
The proceeds will fund the purchase of the K-12 school's existing single-site facility, a 38,065-square-foot school and related facilities, on a 3.6-acre site.
"We think that growing into a full high school academic program presents some management challenges, but our view is that Compass' higher fiscal 2011 enrollment and the revenues that come with that growth will provide the school enough operating margin to deal with a challenging state funding environment," noted credit analyst Chris Morgan.
RELATED CRITERIA AND RESEARCH
USPF Criteria: Charter Schools, June 14, 2007
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Media Contact:
Ana Sandoval, New York (1) 212-438-5095,
[email protected]
Analyst Contacts:
Chris Morgan, San Francisco (1) 415-371-5032
Jennifer Hansen, San Francisco (1) 415-371-5035