Corporate Charter schools, privately run with public funding, have sold $1.6 billion of—state guaranteed—securities in 2014, data compiled by Bloomberg show. That’s more than all of last year and the most in Bloomberg data beginning in 2007. What this means is that in some states the state government is making promises to financially insure corporate Charter schools with public taxes.
Bloomberg News reports that charter schools are borrowing money at a record pace, relying on state guarantees to improve their credit ratings.
On their own, charters would be considered junk bond status. But state guarantees allow them to issue bonds with higher ratings.
U.S. charter schools are issuing a record amount of municipal debt, with Texas leading the charge as borrowers rated close to junk tap a program that gives their bonds top credit grades.
The institutions, privately run with public funding, have sold $1.6 billion of securities in 2014, data compiled by Bloomberg show. That’s more than all of last year and the most in Bloomberg data beginning in 2007. About $464 million has come from Texas, which for the first time in April backed a charter-school deal with its Permanent School Fund. The state-run pool guarantees bonds, lending the debt the AAA grade that Standard & Poor’s accords…
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