HJ Sims Closes on $54.38 Million Series 2022 Bonds for Public Charter School in Greater Forth Worth, Texas
“The team at HJ Sims was experienced, knowledgeable, thorough and easy to work with throughout the bond process. Rob Nickell, Kaiti Wang and Nick Roberts worked hard on behalf of High Point Academy during a turbulent time in the bond market. Their leadership and tenacity paid off as High Point Academy realized its dream of completing the process and securing its forever home.”
– Katie Stellar, CEO and Co-Founder, High Point Academy
High Point Academy is a public charter school educating over 1,650 students in K-12th grades spanning three campuses in the greater Fort Worth area of Texas. The school is projected to grow to serve 2,150 students in K-12 by 2026-27. The school’s charter was initially granted in 2014, and renewed in 2020 for a 10-year term through August 2030.
High Point Academy’s long-term goal and vision is to challenge each child to embrace his or her future with a love of learning, a quest for knowledge and the confidence that they will succeed in life. High Point Academy seeks to provide its students the first-hand experience of team collaboration, successful leadership, project presentation and self-paced project management. Each of these exercises prepares students for success in higher education, career and life by equipping them with the educational tools to navigate their future and the skills to help them make a difference in the outlook of their families, communities and the world around them.
High Point Academy sought financing for the purchase of its three existing leased facilities and capital projects to add a gym and a playground.
The Series 2022A Tax-Exempt and Series 2022B Taxable Education Revenue Bonds enabled High Point Academy to become the owner of the facilities that the school has been occupying, and provided funds to build a gym and a playground. Total bond proceeds of $54,380,000 were used to purchase the properties at a total cost of $43.19 million, pay for the construction projects of $5.38 million, fund a debt service reserve fund, and pay for costs of issuance.
The bonds were structured with a 35-year amortization, and a 5-year maturity with an interest rate reset at that time. The short-term nature of the bonds will provide runway for High Point Academy to grow to its capacity and stabilize, with potential to refinance using the significantly lower cost Texas Permanent School Fund Bond Guarantee Program.
During a stretch of time characterized by high volatility and low liquidity in the municipal markets, the HJ Sims team worked with a number of institutions to determine a mutually beneficial solution that accomplishes High Point Academy’s key goals for the transaction. The tax-exempt bond due 2027 has coupons at 6.0% and a yield of 6.5%. The taxable term bond due 2025 has a 7.0% coupon at par. High Point Academy has the option to call the bonds as early as three years after closing at a redemption price equal to 103% of par.
On July 12, 2022, HJ Sims closed on the $54.38 million Series 2022 Bonds with the entire issuance purchased by Hamlin Capital Management, LLC. With the financing complete, High Point Academy is now the owner of all three of its campuses, which provides educational space for over 2,150 students a year. In addition, this ownership status also relieves the non-profit organization from paying property taxes that had historically been assessed by the county despite the school’s 501(c)(3) status, leaving the school with more money to use towards its instructional programs.
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