The Handbook of Municipal Bonds

CHAPTER 73

The ABCs of Charter Schools

Mitchell Savader Chief Executive Officer The Savader Group LLC and Managing Director Civitas Funding Group LLC

 

 

 

Although still in its infancy, the charter school movement has expanded rapidly over the last decade and a half, growing from a single school in 1992 to several thousand schools today. This growth has fueled the need for numerous school buildings and the related capital necessary to fund construction of new facilities or the purchase and upgrading of existing facilities. Though still a relatively small proportion of the overall public finance market, the issuance of charter school backed debt has created growing investment opportunities, with further growth expected to reflect the ongoing expansion of this relatively young sector. However, investors should be aware of the unique attributes associated with this sector as well as their implications for credit quality. This chapter focuses on some of these unique credit attributes and what analysts should know about them in order to make well-informed investment decisions.

UNDERSTANDING CHARTER SCHOOLS

Charter schools are publicly funded schools typically created to achieve two results: to provide students with educational opportunities not otherwise available and to hold schools accountable for the results they produce. In addition, charter schools can often operate with significant autonomy and flexibility as they are not normally held to many of the same legal and regulatory ...