Proceeds from the bonds will be used to fund a campus expansion project, reimburse Fleet for prior capital expenditures, fund a debt service reserve fund (DSRF
) and capitalized interest, and pay a portion of the cost of issuance.
The state's MO program for eligible charter schools provides that in the event of a draw on any eligible charter's DSRF
, the Colorado Educational and Cultural Facilities Authority (CECFA), the issuer of the charter's bonds, shall request that the governor replenish the DSRF
and that the governor pledges to seek a state legislative appropriation for DSRF
In addition, certain bonds issued before 2007 are protected from losses by DSRFs
, which were initially funded by a combination of federal capitalization grants, matching state contributions, and/or excess obligation repayments.
In addition to overcollateralization, the program's prior resolution bonds have approximately $49 million in DSRFs
, which is equal to 6.4% of total bonds outstanding.
for each applicable bond series is maintained at the least of maximum annual debt service, 125% of average annual debt service, or 10% of original bond proceeds.
Mixed Debt Profile: The rated debt benefits from its fully amortizing profile, senior lien, and cash-funded DSRF sized to the maximum allowed by the IRS.
Fitch's breakeven analysis demonstrates strong cash flow resiliency, as total revenues would have to fall 1.4% annually through final maturity in fiscal 2054 for DSCR to decline to 1.0x assuming complete draw-downs of the DSRF and unrestricted cash balances.
Section 22-30.5 407 provides for a state-level charter school DSRF (CSDRF) that can be tapped to make a eligible charter school debt service payment should the bond trustee not receive a timely payment from the school and should the school's own DSRF have been exhausted.
The program is limited to a total par value of $500 million of eligible charter school bonds and is available for bond issues that have met certain eligibility requirements, including receiving an initial investment-grade rating indication and being secured by the state-level DSRF under CRS 22-30.5 407.
The bonds are secured by loan repayments, investment earnings, and debt service reserve funds (DSRF).
Bondholders are protected from losses primarily by a DSRF established for each borrower.
The GRF is maintained at the difference between the actual balance in each DSRF and the current aggregate DSRF requirements.