S&P Global Ratings lowered its underlying rating to 'B+' from 'BB-' on Arlington Higher Education Finance Corp., Texas' series 2016 and 2017 education revenue bonds, issued for A.W. Brown Leadership Academy (A.W. Brown). The outlook is negative. The rating action reflects our view of A.W. Brown's weakened financial profile, leading to three full-accrual operating deficits and lease-adjusted maximum annual debt service (MADS) coverage below 1x, with expectations for similar results in fiscal 2022. As of June 30, 2022, the school had $25.5 million in total debt outstanding, consisting of the series 2016 and 2017 revenue bonds and a $2.0 million privately placed loan with CRSS Small Business Lending. One hundred percent of per pupil state aid, which, as defined in
