Maricopa County Industrial Development Authority, Arizona 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 2017A, 2017B, 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 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 2017A, 2017B, 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 "Arizona Public School Credit Enhancement Program; State Revolving Funds/Pools,"

...We assessed GHA's enterprise profile as strong characterized by its large size and the diversity provided by its network schools, growing enrollment, solid demand, excellent academics, and a sophisticated and highly capable management team. We assessed GHA's financial profile as vulnerable with a moderately high maximum annual debt service (MADS) burden, offset by its large revenue base, history of positive operating margins, recently improved MADS coverage and sufficient 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 '###-'. We understand the organization continues to execute on its growth strategy to fill out enrollment at its current campuses. At this time, GHA has no definitive plans to open additional schools, though there are ongoing capital planning and strategic discussions. We expect to evaluate these plans and any resulting financing needs as details are finalized....

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