A rare New Jersey charter school deal hits the market this week.

The New Jersey Economic Development Authority is issuing $24.7 million of series 2017 revenue bonds Thursday for NSA 18th Avenue LLC on behalf of North Star Academy Charter School of Newark.

NSA 18th Avenue, a single-purpose New Jersey limited liability company, plans to use the bond proceeds to fund renovations at the 20-year old school and a 47,160 square-foot expansion. The negotiated deal is led by sole manager George K. Baum & Company with Chiesa Shahinian & Giantomasi PC as bond counsel.

S&P Global Ratings assigned its BBB-minus rating, citing the school’s “vulnerable” financial profile that includes limited days’ cash on hand that is offset by past consistent operating performances. The bonds are secured by lease payments from North Star to NSA 18th Avenue, a mortgage on the financed properties and a debt service reserve fund.

Through the end of September, New Jersey charter schools have accessed the tax-exempt bond market through 13 transactions since 2003 totaling roughly $148.5 million, according to Wendy Berry, director and lead education analyst at NewOak. New Jersey laws governing charter schools are stricter than most states. The renewal process includes benchmark targets for each charter school that if not met could result in a revocation at the end of its term.

Nationally, Berry said the pace for charter school bond issuance is on track to fall just short of last year when volume rose for a fifth straight year to $2.8 billion, but that demand is still strong with a large pipeline. She said investor interest has been aided by certain states like Colorado, Utah, Texas and Arizona instituting credit enhancement programs for charter school bonds the last four years that provide a A-level ratings on some deals.

“You now have a broad range of ratings,” said Berry. “You have a lot of retail at the higher rating levels so there is more demand there.”

Berry noted that while only 5% of all public school students attend charter school, the story is far different in some cities. New Orleans has the largest charter school market share at 92% followed by more than 50% in Detroit and Flint, Mich. Washington, D.C. and Kansas City, Mo. also have large charter school enrollment at 45% and 43%, respectively.

S&P credit analyst Jessica Matsumori said in a January report that the outlook for charter school bonds was stable in 2017 thanks in large part to increased demand for high-yield paper. She cautioned though that while the number of students attending charter schools is increasing, the sector’s growth is a credit negative for existing schools.

Five states accounted for 60% of charter school bond volume from 1998 through 2016, according to NewOak data: Texas, Arizona, Colorado, California and Florida. Charter schools in 31 states have accessed the municipal market in the last two decades.

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