S&P Global Ratings Elevates Equitable School Fund Rating to A+, Signifying Strong Impact in Charter School Financing
In a significant development for charter schools across the United States, S&P Global Ratings has upgraded the Equitable School Revolving Fund (ESRF) from an A rating with a positive outlook to an A+ rating with a stable outlook. This upgrade is a testament to the ESRF's solid operational effectiveness and sound financial health, which showcase the leadership role of the Equitable Facilities Fund (EFF) in providing accessible financing to high-performance charter schools.
The Equitable School Revolving Fund is a pooled charter school loan program designed to increase access to affordable facilities financing, primarily for schools that might otherwise struggle to secure necessary funding. As the program administrator, EFF oversees the structuring, underwriting, and management of a diverse portfolio of loans supporting charter school facilities nationwide. Over the past six years, ESRF has successfully issued multiple bond series to enhance EFF's revolving loan platform, further enabling capital infusion to schools facing disadvantages in financing, especially when compared to traditional public school districts.
Anand Kesavan, the Founder and CEO of EFF, pointed out that the upgrade from S&P is an important validation of their mission and procedures. According to Kesavan, the upgrade underscores the effectiveness of their disciplined execution and strong underwriting processes, along with a portfolio that consistently performs well in supporting impactful charter schools.
S&P Global Ratings' analysis noted multiple strengths within the ESRF framework. It highlighted that the program maintains a diversified loan portfolio across various states and markets, which reflects an effective risk management strategy. Furthermore, ESRF has a long operational history marked by the absence of delinquencies or defaults, showcasing credit discipline and rigorous loan monitoring. The program's fundamentals are considered strong, and an overcollateralization of assets contributes to a resilient risk profile.
The stable management practices and transparent underwriting processes under EFF's administration also received mention in S&P's assessment. An upgrade to A+ is forecasted to enhance the program's appeal to capital market investors, enabling EFF to raise cost-effective capital for charter schools. This scenario will significantly bolster efforts to expand their lending platform, particularly for schools serving historically underserved communities.
The timing of this upgrade coincides with ESRF's projected bond issuance in February 2026, during which the organization is aiming to issue around $275 million in fixed-rate, senior lien "A+" rated bonds to support its ongoing lending throughout 2026. This initiative aims to leverage its vast and heterogeneous loan portfolio, which encompasses 115 loans totaling approximately $1.9 billion across 24 states.
S&P's outlook on the upgraded rating underscores a belief that the program's diverse, well-managed, and mission-aligned portfolio is poised for sustained performance. More significant, Kesavan indicated that the real beneficiaries of this upgrade are the schools serviced by the fund. More efficient access to capital lessens costs for schools, allowing them to allocate more resources toward improving student outcomes and maintaining long-term viability.
The Equitable Facilities Fund stands out as a nonprofit social impact organization devoted to providing fixed-rate, affordable facilities financing to quality charter schools across the United States. Since its establishment, EFF has deployed around $1.9 billion in financing, primarily aiding schools that serve predominantly low-income students and communities of color. The Equitable School Revolving Fund is instrumental in helping charter schools access essential capital through the issuance of investment-grade bonds backed by a diversified portfolio of high-credit charter school facility loans, creating opportunities for long-term, socially responsible investments.
The Equitable School Revolving Fund is a pooled charter school loan program designed to increase access to affordable facilities financing, primarily for schools that might otherwise struggle to secure necessary funding. As the program administrator, EFF oversees the structuring, underwriting, and management of a diverse portfolio of loans supporting charter school facilities nationwide. Over the past six years, ESRF has successfully issued multiple bond series to enhance EFF's revolving loan platform, further enabling capital infusion to schools facing disadvantages in financing, especially when compared to traditional public school districts.
Anand Kesavan, the Founder and CEO of EFF, pointed out that the upgrade from S&P is an important validation of their mission and procedures. According to Kesavan, the upgrade underscores the effectiveness of their disciplined execution and strong underwriting processes, along with a portfolio that consistently performs well in supporting impactful charter schools.
S&P Global Ratings' analysis noted multiple strengths within the ESRF framework. It highlighted that the program maintains a diversified loan portfolio across various states and markets, which reflects an effective risk management strategy. Furthermore, ESRF has a long operational history marked by the absence of delinquencies or defaults, showcasing credit discipline and rigorous loan monitoring. The program's fundamentals are considered strong, and an overcollateralization of assets contributes to a resilient risk profile.
The stable management practices and transparent underwriting processes under EFF's administration also received mention in S&P's assessment. An upgrade to A+ is forecasted to enhance the program's appeal to capital market investors, enabling EFF to raise cost-effective capital for charter schools. This scenario will significantly bolster efforts to expand their lending platform, particularly for schools serving historically underserved communities.
The timing of this upgrade coincides with ESRF's projected bond issuance in February 2026, during which the organization is aiming to issue around $275 million in fixed-rate, senior lien "A+" rated bonds to support its ongoing lending throughout 2026. This initiative aims to leverage its vast and heterogeneous loan portfolio, which encompasses 115 loans totaling approximately $1.9 billion across 24 states.
S&P's outlook on the upgraded rating underscores a belief that the program's diverse, well-managed, and mission-aligned portfolio is poised for sustained performance. More significant, Kesavan indicated that the real beneficiaries of this upgrade are the schools serviced by the fund. More efficient access to capital lessens costs for schools, allowing them to allocate more resources toward improving student outcomes and maintaining long-term viability.
The Equitable Facilities Fund stands out as a nonprofit social impact organization devoted to providing fixed-rate, affordable facilities financing to quality charter schools across the United States. Since its establishment, EFF has deployed around $1.9 billion in financing, primarily aiding schools that serve predominantly low-income students and communities of color. The Equitable School Revolving Fund is instrumental in helping charter schools access essential capital through the issuance of investment-grade bonds backed by a diversified portfolio of high-credit charter school facility loans, creating opportunities for long-term, socially responsible investments.
Topics Financial Services & Investing）
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