Fitch Ratings downgraded Chester Community Charter School’s revenue bonds to BB from BBB, bringing the Pennsylvania school’s rating to below investment grade.
The downgrade affects $57.4 million of the outstanding charter school revenue bonds issued by the Delaware County Industrial Development Authority on behalf of the school.
Fitch said the downgrade reflects CCCS’ inability to access funding, which is allocated by the state through the Chester Upland School District. Pennsylvania’s revenue bonds are rated AA-plus by Fitch. The CUSD has no underlying bond rating.
The school’s inability to access funding is a result of the Chester Upland School District’s cash-flow problems, which began in 2010 and have since drawn national attention.
The district has failed to provide required payments to CCCS, which may have to close its doors before the end of the academic year.
CCCS, the CUSD and the Pennsylvania Department of Education have attempted to work out a resolution in a recent meeting, but no firm decisions were made. Fitch says a timely resolution to the funding impasse could affect the school’s rating.