GreatHearts Arizona; Charter Schools; School State Program

S&P Global Ratings affirmed its 'BBB-' underlying rating for credit program on the Industrial Development Authority of the County of Maricopa, Ariz.'s series 2017C and 2017D education revenue bonds, issued for GreatHearts Arizona (GHA; formerly known as Great Hearts Academies). In addition, we affirmed our existing 'BBB-' rating on the authority's series 2017A and 2017B education facility revenue bonds, as well as the Phoenix Industrial Development Authority, Ariz.'s series 2016 and 2014 education facility revenue bonds, also issued for GHA. The outlook is stable. The 'AA-' long-term enhanced program rating on the series 2017C and 2017D bonds is based on inclusion in the Arizona Public School Credit Enhancement Program. For more information on the program rating, please see the report

...forma maximum annual debt service (MADS) coverage, and a moderately high pro forma MADS burden, offset by a large revenue base and good liquidity position for the rating level. We believe that combined, these credit factors lead to an indicative standalone credit profile of '###-' and a final rating of '###-'. GHA continues to successfully execute on its growth plans, with continued organic growth as grades are filled in across the newer network schools. While the last new school opened in fall 2015, GHA has transitioned to three new campuses (Archway Scottsdale, Maryvale and North Phoenix) in fall 2017 and fall 2018 supporting additional capacity. We understand the organization has no plans at this time to open additional schools, though there are ongoing capital planning and strategic discussions. The rating reflects our opinion of the network's: + Consistent history of surplus operations, with improved margins in fiscal 2018 compared with prior year results; + A good 114 days' cash on...

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