Summary: Michigan Finance Authority Detroit Service Learning Academy; Charter Schools

S&P Global Ratings placed its 'B' long-term rating on Michigan Finance Authority's series 2011 public school academy limited obligation revenue and refunding bonds, issued for Detroit Service Learning Academy (DSLA), on CreditWatch with negative implications. The CreditWatch negative reflects our view of the immediate refinancing risk associated with DSLA's series 2014A and 2014B bonds (not rated), which have a $6.075 million bullet maturity coming due Sept. 1, 2021. In our view, the short time horizon to maturity of the bonds increases the risk of a near term event of default. Additionally, there is cross default risk in relationship to the rated series 2011 bonds which could trigger acceleration of all its debt. Total outstanding debt was $15.27 million as of

...S&P Global Ratings placed its 'B' long-term rating on Michigan Finance Authority's series 2011 public school academy limited obligation revenue and refunding bonds, issued for Detroit Service Learning Academy (DSLA), on CreditWatch with negative implications. The CreditWatch negative reflects our view of the immediate refinancing risk associated with DSLA's series 2014A and 2014B bonds (not rated), which have a $6.075 million bullet maturity coming due Sept. 1, 2021. In our view, the short time horizon to maturity of the bonds increases the risk of a near term event of default. Additionally, there is cross default risk in relationship to the rated series 2011 bonds which could trigger acceleration of all its debt. Total outstanding debt was $15.27 million as of fiscal 2020. DSLA has insufficient liquidity in the form of cash or lines of credit to cover the bullet maturity. Unrestricted reserves were $2.3 million or 70-days' cash on hand as of June 30, 2020. Currently, a lower rating is...

Summary