Charter School Tax-Exempt Bond Market Grows to $6.4 Billion

News Details

Posted: November 16, 2012
Focus Areas: Facilities Financing

The tax-exempt charter school bond market has grown to more than $6.4 billion since 2010, with the issuance of about $1.14 billion in bond offerings from January 2011 through May 2012, according to a Local Initiatives Support Corporation report.

Charter School Bond Issuance: A Complete History, Volume 2, an update of the community development financing organization's 2011 report, includes extensive data and analyses, including listings of schools’ debt, results from an examination of hundreds of school financial reports, debt payment performance, indicators of schools’ creditworthiness, borrowing costs, and data breakouts by state.

Four states – Arizona, Colorado, Michigan, and Texas – account for more than 50 percent of the bonds, according to the report.

The report states that the average issue size overall is $12.1 million, while the average for issues examined since January 2011 is $15.2 million. The average total borrowing cost for issues in the latest 17-month period was 7.6 percent. The default rate reported on the total $6.4 billion is 2.7 percent.