Summary: Maricopa County Industrial Development Authority GreatHearts Arizona; Charter Schools

S&P Global Ratings assigned its 'AA-' enhanced program rating and 'BBB-' underlying rating for credit program to the Industrial Development Authority of the County of Maricopa, Ariz.'s series 2017A and 2017B education facility revenue bonds, to be issued for GreatHearts Arizona (GHA; formerly known as Great Hearts Academies). The outlook is stable. The 'AA-' long-term enhanced program rating on the series 2017A and 2017B bonds reflects the conditional approval of this series of bonds into the Arizona Public School Credit Enhancement Program. Final approval is conditional upon certain conditions being met prior to bond closing. In the unlikely event that the related fund certificate is not executed, the enhanced rating will be withdrawn. For more information on the program rating,

...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 history of positive, though moderating, operating margins, slim pro 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. Though pro forma MADS coverage is low for the rating, we view the additional debt as manageable at the rating level given the stability of the rest of GHA's financial profile. In our view, GHA is at debt capacity 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, the last phase of which included...

Summary