Thacher School, CA Bond Rating Raised To 'AA' On Reduced Pro Forma Debt Load And Burden; Outlook Stable

NEW YORK (S&P Global Ratings) May 17, 2019--S&P Global Ratings raised its long-term rating on the California Enterprise Development Authority's series 2010 revenue refunding bonds, issued for the Thacher School, to 'AA' from 'AA-'. At the same time, S&P Global Ratings assigned its 'AA' long-term rating to the authority's series 2019 revenue refunding bonds, issued for the Thacher School. The outlook on all these ratings is stable.
The series 2010 bonds are expected to be refunded with the series 2019 issuance, at which time we expect to withdraw our rating on those bonds. In conjunction with the series 2019 issuance, which will refund its prior bonds for interest rate savings, Thacher is making a $10 million equity contribution to reduce its debt outstanding.
"The upgrade reflects our view of Thacher's reduced pro forma debt load and significantly moderated pro forma debt burden, which combined with Thacher's growing financial resources, consistently positive operations, successful fundraising history, and healthy demand support the higher rating," said S&P Global Ratings credit analyst Avani Parikh. "In our view, Thacher's solid enterprise profile and strengthened financial metrics provide sufficient offset for the school's modest enrollment size at the 'AA' level."
The stable outlook reflects our anticipation that over the two-year outlook period, Thacher will maintain its healthy enrollment and demand profile, financial resources will continue to improve incrementally, and the school will sustain positive operations on a full-accrual basis.
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