A.W. Brown Fellowship Leadership Academy, TX Revenue Bond Rating Lowered To 'BB' On Weakening Credit Fundamentals

SAN FRANCISCO (S&P Global Ratings) Oct. 18, 2018--S&P Global Ratings lowered its underlying rating to 'BB' from 'BBB-' on Arlington Higher Education Finance Corp., Texas' series 2016 and series 2017 education revenue bonds, issued for A.W. Brown Fellowship Leadership Academy (A.W. Brown). The outlook is stable. "The lowered underlying rating reflects a material weakening in A.W. Brown's credit fundamentals, in our view, based on fiscal 2017 performance and expected fiscal 2018 results, with operating deficits, below 1x annual debt service coverage, a history of covenant violations, and declining enrollment for fall 2018, combined with weakened student retention and overall demand," said S&P Global Ratings credit analyst Ying Huang. The 'AAA' enhanced program rating reflects our view of A.W Brown's participation

...SAN FRANCISCO (S&P Global Ratings) Oct. 18, 2018--S&P Global Ratings lowered its underlying rating to '##' from '###-' on Arlington Higher Education Finance Corp., Texas' series 2016 and series 2017 education revenue bonds, issued for A.W. Brown Fellowship Leadership Academy (A.W. Brown). The outlook is stable. "The lowered underlying rating reflects a material weakening in A.W. Brown's credit fundamentals, in our view, based on fiscal 2017 performance and expected fiscal 2018 results, with operating deficits, below 1x annual debt service coverage, a history of covenant violations, and declining enrollment for fall 2018, combined with weakened student retention and overall demand," said S&P Global Ratings credit analyst Ying Huang. The '###' enhanced program rating reflects our view of A.W Brown's participation in the Texas Permanent School Fund (PSF) Bond Guarantee Program, which provides the security of a permanent fund of assets that A.W. Brown may tap if necessary to meet its debt service...

Ratings Action