In October 2018, Buck Financial Advisors closed two charter school bond issues totaling over $90 million for The Palmdale Aerospace Academy and for Green Dot Public Schools California. Both issues, one investment grade and one non-investment grade, were well received by bond investors, and were significantly oversubscribed.
The Palmdale Aerospace Academy (TPAA) in Palmdale, CA currently operates a STEM-focused charter school serving grades 6-12. In early October 2018, TPAA closed its second bond issue to finance its expansion into serving elementary grades to allow TPAA to become a K-12 school. TPAA enjoys very strong support from the local aerospace industry, which is a large portion of the economy in the Antelope Valley, including operations of NASA and various defense contractors. TPAA also has strong support from the local city government and the local authorizing school district. It had issued about $45 million of bonds in 2016 for the 6-12 operation, and the 2018 issue approximated $37 million. TPAA’s issue received over $300 million in orders. The 2018 financing was rated “BB” by Standard & Poor’s (same as 2016) and will allow TPAA to expand from about 1,600 students to over 2,300 in a few years.
Green Dot Public Schools California (GDCA) is one of the longest-serving CMOs in the Los Angeles, CA region. It began in operating its first charter school, Animo Leadership Charter High School, in 2000 and now operates 21 charter high schools and middle schools in the greater Los Angeles area serving about 11,500 students. GDCA had done a number of financings dating back to 2007, mainly New Markets Tax Credits (NMTC), and one stand-alone bond issue for Animo Inglewood Charter High School in 2011. In 2015, GDCA issued its first obligated group financing for four schools whose purpose was to refinance the NMTC debt prior to the end of their respective compliance periods totaling just over $30 million. In October 2018, GDCA issued an additional $56 million to add five more schools to the original obligated group, which now totals nine of their 21 schools. The bond issue was rated BBB- with a positive outlook by Standard & Poor’s. About $900 million of orders were received for a $56 million offering, and GDCA’s 2018 issue received the 2nd narrowest spread to the MMD for an un-enhanced charter school bond issue ever (the CA CMO which received a narrower spread to the MMD for their 2017 issue carried a higher rating and is also a Buck Financial client).
GDCA’s Animo Oscar de La Hoya Charter High School ranked in the top 10 high schools in all of Los Angeles. GDCA is well known for its willingness to operate, and success at operating, turnaround schools, having taken over the Alain Leroy Locke High School in 2007, 40 years after it had been opened in 1967 in response to the Watts riots. Across the board, GDCA’s high schools are ranked in the top 10% nationally by US News & World Report, which is quite an achievement. GDCA often takes kids into the 9th grade that are several grade levels behind because they do not operate elementary schools and not all high schools have Green Dot middle school feeders. And yet, they achieve tremendous results, which helps explain why in September 2018 five of their schools were renewed by LAUSD for another five years (on the consent agenda).
Congratulations to TPAA and GDCA for receiving such strong interest and demand from bond investors. It is a testament to both schools’ strong operations and success in the classroom. Both organizations are repeat clients, and Buck Financial Advisors is proud to be a small part of their overall success.