Uplift Education, North Texas’ largest charter school network, sold a $41 million bond package to fund its expansion plans.
Standard and Poor’s Rating Services assigned its BBB- stable rating to the Clifton Higher Education Finance Corp., Texas’ bond series issued for Uplift Education. The stable rating made it possible for Uplift to sell its bond package at some of the most favorable rates ever seen in a Texas charter school unenhanced bond sale. Lower interest rates means Uplift will be able to keep more money in its classrooms.
Uplift will use a portion of the revenue from the issue to finance two new school buildings, renovate and expand existing campuses, and refinance new schools that opened in 2014. The network intends to grow its enrollment base from its current level of 12,000 students to 18,000 students by 2019. The September 10 bond issue brings Uplift’s recent issues to more than $230 million.
“We’ve now received the BBB- rating since 2000, which has put us in an excellent position to go to the bond market. In our current issue, we’ve been able to secure the most favorable rates ever issued to a Texas charter school at around 4.6% for our Long Bonds. We appreciate the confidence the market has in our ability to manage our debt as we expand our network over the life of the bonds,” Uplift CFO Bill Mays said.
The BBB- rating also means that Uplift Education will have future access to the State of Texas’ Permanent School Fund (PSF). The PSF is a $29 billion fund used to guarantee bond funding to Texas schools. Under Texas legislation (SB1 and HB885) passed in 2011 and 2013, charter schools must have an investment grade rating to access the PSF and meet the TEA’s accountability standards. Uplift Education is now positioned to leverage the PSF for future debt refinancing and bond guarantees at AAA rates.
“We’re pleased to be in such a stable financial position. It shouldn’t be a financial burden on educational institutions to build schools, and since as a charter network we are not able to access State of Texas facilities funding through the Foundation Schools Program or raise funds through taxing authority, the favorable rates help us tremendously. Instruction and facilities go hand-in-hand, and we have worked hard to ensure that we are able to provide high quality classroom space for our scholars and teachers,” Uplift CEO Yasmin Bhatia said.
The S&P assessment reflects that Uplift Education has effectively managed both its debt and its finances, demonstrating its ability to meet the demand for educational choice in Dallas while creating enough financial stability to service its debt. S&P also expects Uplift to meet the Texas Education Agency’s standards in order to maintain its charter status with the State.
All of these factors bode well for the future stability of the Uplift network and its ongoing effort to meet the education needs of North Texas’ families.
“We have planned a period of growth. Financing the expansion of Uplift Education in a responsible way is one of our key priorities. We understand this requires constant vigilance and transparency. This S&P rating assures us our footing is strong as we push towards our goal of helping all North Texas students get accepted to and be successful in college,” said Uplift CEO Yasmin Bhatia.