Standard & Poor's on Tuesday lowered the rating to speculative-grade BB-plus from BBB-minus on the West Philadelphia Achievement Charter Elementary School's $7.45 million revenue bonds.
The bonds were issued by the Philadelphia Authority for Industrial Development.
"The downgrade reflects our view of WPACES's weaker academic performance compared with last year and current enrollment levels that greatly exceed the charter cap, which the charter authorizer, the school district of Philadelphia, is concerned with, presenting, in our opinion, risk to future charter renewal," said Standard & Poor's credit analyst Sharon Gigante.
The school reported lower test scores that did not meet adequate yearly progress requirements and the rating action is a result of the authorizer's concern about academic performance, Gigante said.
Standard & Poor's expects this to be an ongoing challenge for the couple of years as the school works toward improving performance.
If the school district continues to site concerns regarding poor performance, the agency could take negative rating or outlook action.