S&P Global Ratings revised its outlook to negative from stable and affirmed its 'BBB' long-term rating on the California School Finance Authority 's series 2019, 2021, and 2024 charter school revenue bonds issued for Granada Hills Charter Obligated Group (GHC). The outlook revision reflects our view of GHC's weakening operating performance based on fiscal 2025 unaudited figures leading to lease-adjusted maximum annual debt service (MADS) coverage below 1.0x and a debt service coverage (DSC) covenant violation, coupled with a deficit budget for fiscal 2026. We understand management is committed to making budget adjustments in fiscal 2026; however, if GHC is unable to stabilize and improve operations, resulting in persistent operating deficits and sustained weak DSC, we could lower the rating.
