The Charter School Bond Sector: 2019 Year in Review provides an overview and analysis of the total dollar amount of charter school bond issuances, total number of charter school bond transactions, states with the highest concentration of issuances, percentage of rated charter school bond transactions, underwriting activity, and the charter school bond transactions that have defaulted in the year of 2019. 

In 2019, the charter school sector registered $3.712 billion of charter school issuances comprised of 153 distinct transactions. When compared to 2018, in total dollar amount of charter school bond issuances there was a 25% increase and 17.3% in number of distinct transactions from 130 to 153. In addition, for 2019 the range of transactions in the tax-exempt charter school market was $4.35 million to $214 million dollars.

Aside from an overview and analysis of all the tax-exempt charter school transactions for 2019 year, you will also find the top trends in the general charter school sector and the charter school bond sector.

General Charter School Trends:

• Flat, reduced, or deferred per pupil revenue in certain states due to COVID-19 effects on state and local revenues.
• Greater reliance by schools (district and charter) on cash-flow borrowing, particularly if liquidityis affected by reduction or deferment of per pupil revenue
• Stronger political headwinds regarding funding and the slowingof charter school growth;- Increased push for unizatin of teachers and other staff; and - Strenghtening authorizer quality and standards which is likely to result in higher bars for approving new schools and renewing existing school

Charter School Sector Trends:

• Annual sector issuance between $3 billion and $4 billion
• Increase presence of repeat large borrowers accessing the market with mega-deals of more than $100 million;
• Given S&P's expansion of charterunderlying ratings to "A-", other large, sophisticated borrowers may become eligible for higher ratings;
• Higher average par amount—2019 ended with an all-time high per transaction average par amount of over $24 million;
• Continued high percentage of unrated credits comming to market;
• Rating downgrades and negative outlooks likely to follow any material cuts or deferments in per pupil revenue. 
• Shorter call dates on more transactions—down from the long-standing custom of 10 years—this trend could reverse if tax law is changed allowing once again for advance refundings
• Fewer refunding transactions given the low 2010 and 2011 issuance levels combined with current proscription of advance refunding transactions in the tax-exempt bond market 
• Greater use of out-of-state issuers due to poltical headwinds; and
• Relatively stable deafult rate on transaction count basis with continued declining trend based on original par amount.

Access the Charter School Bond Sector: 2019 Year in Review Here