BRADENTON, Fla. — The Sarasota School of Arts and Sciences has closed on a rare municipal bond offering from a Florida charter school.
PNC Capital Markets LLC underwrote the $11.04 million deal, which closed June 30. Holland & Knight LLP was bond counsel. Quarles & Brady LLP was underwriters’ counsel.
The bonds were sold by Sarasota County on behalf of the charter school, which is using the proceeds to build a new 39,000-square-foot, three-story school and a 10,000-square-foot multi-use gymnasium and community center, and to refinance approximately $3 million of existing debt.
The deal was structured as $1 million maturing in 2017 that priced to yield 5.2%, $3.5 million maturing in 2030 priced to yield 6.37% with a 6.75% coupon, and $6.53 million maturing in 2040 priced to yield 6.65% with a 6.5% coupon.
The bonds were rated BBB-minus by Standard & Poor’s.
“We were able to provide attractive financing for this customer thanks to their positive standing within the community, which allowed us to attract strong demand for their bonds,” said PNC director Greg McKenna, who has worked on nine charter school deals totaling $148.9 million.
McKenna said spreads on 30-year charter school deals have narrowed to around 250 basis points from as much as 400 basis points 14 to 15 months ago. He expects issuance to grow now that charter schools can get “fixed-rate deals at reasonable rates,” he said.
“Sarasota knows what its budget will be for the next 30 years,” McKenna said. “Now they can go about providing educational studies and not have to worry about finding equity for bank loans.”
The Sarasota School of Arts and Sciences opened in 1997-98 with approximately 50 students in sixth grade. Seventh and eighth grades were added in the next two years. Approximately 665 students are currently enrolled and live in Sarasota and Manatee counties, which are part of the Tampa Bay area on the state’s west coast.
The Sarasota offering was the first financing for a Florida charter school in nearly two years, according to Thomson Reuters.
PNC Capital Markets is an affiliate of Pittsburgh-based PNC Financial Services Group Inc., which purchased National City Bank in 2008 and its branches in Florida.
“PNC is looking to expand its public finance presence in Florida in the areas of charter schools and higher education, local governments, housing and redevelopment, and health care,” McKenna said.
PNC ranked 22nd among the top 100 senior managers in 2009 on 151 deals with a par amount of $2.35 billion, Thomson Reuters statistics showed.
