S&P Global Ratings revised the outlook to negative from stable and affirmed its'BBB-'rating on the California School Finance Authority's (CSFA) series 2023A and 2023B charter school revenue bonds, issued for STEM Preparatory Schools Inc.’s obligated group. The outlook revision reflects the compression in STEM’s financial performance, based on its fiscal 2025 audited figures and fiscal 2026 unaudited results. Management has indicated operating margins will remain weak through fiscal 2027, which we believe could pressure financial performance ratios. We will continue to monitor the school’s moving its middle school away from its co-located district facility, which is expected to occur by fall 2028. Total debt outstanding as of June 30, 2025, was $17.1 million, consisting of $10.9 million
