The Colorado Education and Cultural Facilities Authority sold $22.7 million in bonds to finance improvements at a new charter high school near Denver.
The authority sold the securities in two federally taxable term bonds. The Series 2023A bond, consisting of $22.2 million, matures on July 1, 2034, and yields 7%. The Series 2023B bond, consisting of $465,000, matures on July 1, 2028, and yields 8.125%. The securities have not received a rating.
The authority will loan the bond proceeds to the STEAD School Building Corporation, a nonprofit affiliated with a charter school of the same name in Commerce City, 10 miles north of central Denver. The school aims to provide a Colorado spin on the principles of science, technology, engineering, and mathematics (STEM) education, which has become more common in recent decades. (STEAD stands for science, technology, environment, agriculture, and systems design.)
On its website, the school bills itself as the “first fully integrated Nextgen Agriculture Secondary School focused on preparing young adults how to engage in and solve complex global food, health, energy, and environmental issues.”
The school opened in 2021, with about 160 students in its inaugural ninth grade class. The first graduating class will matriculate in 2025.
STEAD is riding a wave of interest in U.S. charter schools, which increased in popularity in the wake of the COVID-19 pandemic. Enrollment in charter schools increased from 6.8% of all public school students in 2019-2020 to 7.4% in 2021-22, according to the National Alliance for Public Charter Schools, an industry group. Public charter school enrollment more than doubled between 2010 and 2021, reaching a high of 3.7 million students, according to the National Center for Education Statistics.
The bonds are special, limited obligations of the authority, secured by loan repayments from the STEAD School Building Corporation.
RBC Capital Markets, LLC served as underwriter on the issuance, purchasing the bonds for close to par. PFM Financial Advisors LLC acted as financial advisor.