Its been a busy week for IDEA and Buck Financial (among others).
In March 2021, IDEA Public Schools (TX) closed their $196 million Variable Rate Education Revenue Bond issue through the Clifton Higher Education Finance Corporation. This issue is guaranteed under the Bond Guarantee Program of the Texas Education Agency, which uses the State’s Permanent School Fund to guarantee qualifying bond issues for school districts and charter schools. A charter school must have an underlying rating of investment grade.
IDEA qualifies, as they remain the only charter network in the country to receive an underlying rating in the “A” category, with S&P Global reaffirming the “A-” SPUR with stable outlook, which was initially assigned in 2019. Due to the PSF guarantee, the bonds also received a “AAA” enhanced rating.
Projects funded with the bonds include the development of campuses in the Rio Grande Valley, San Antonio, Austin, El Paso, Tarrant County, the Permian Basin, and Houston. Proceeds will also be used to repay a line-of-credit used to begin many of these projects. IDEA operates 111 schools as of Fall 2020, with over 62,000 students. Despite budgeting for almost $800 million in revenues for fiscal 2021, IDEA carried almost 140 Days Cash On Hand into the fiscal year, an amazing accomplishment (and alliteration). With this issue, IDEA will have approximately $1.2 billion (with a “B”) in debt outstanding, almost all of which is PSF guaranteed.
IDEA’s scale does not adversely impact their academic results, either. It rates among the highest performing CMOs in Texas and the nation while its continues to serve a student base that is predominantly low-income.
Buck Financial Advisors serves as Co-Financial Advisor to IDEA (TX) along with Masterson Advisors. Robert W. Baird & Co. Inc. served as placement agent for the offering. Hunton Andrews Kurth served as bond counsel. PMSI out of Austin serves as project manager for all of IDEA’s construction projects, and InSite EFS serves as real estate broker for IDEA. Congratulations to the students, family, staff and board of IDEA Public Schools on your continued success.