HJ Sims Closes on $21.395 million Series 2022 Bonds for North Carolina Public Charter School, Shining Rock Classical Academy
“Thank you so much for helping [Shining Rock Classical Academy] navigate a tricky bond market. Working with HJ Sims has been such a relief and a pleasure. The entire team was helpful, motivated, and applied a gentle accountability to the process. I wish we would have started this process with HJ Sims rather than having found [them] midway through. I think it would have been a much smoother process overall. I have complete faith in [the HJ Sims] team’s experience and confidence, and I wouldn’t hesitate to use [HJ Sims] again in the future. Thanks a million!! Seriously, there are not enough words to describe my gratitude.”
– Melanie Norman, Board Chair, Shining Rock Classical Academy
Shining Rock Classical Academy (SRCA) is a public charter school educating 601 students in Waynesville, NC. The school seeks to develop college-ready, lifelong learners. SRCA has a curriculum based on a “whole student” with a strong emphasis on science and social studies. The initial charter was granted in 2015, and renewed in 2020 extending the charter to 2027.
Shining Rock Classical Academy is projected to grow to serve 850 students in K-12 by 2026-27. The school is currently located on two campuses and sought financing to buy out of their lease on one campus and refinancing an existing loan. Shining Rock Classical Academy is also contemplating plans to expand one of their campuses to include more space for high school students.
The Series 2022A tax-exempt and Series 2022B taxable Education Revenue Bonds enabled Shining Rock Classical Academy to purchase the property housing their main campus, while also providing funds to reimburse the school for capital expenditures and pre-development costs associated with the contemplated future expansion. Total bond proceeds of $21,213,607 were used to purchase the Russ property at a purchase price of $16,469,990, refinance a taxable loan of $1,194,767, fund the reimbursement of various capital expenditures, fund a debt service reserve fund, and pay for costs of issuance.
The bonds were structured with a 35-year final maturity, allowing for the lowest annual debt service, and with a 7-year call option at a 101% redemption price.
During pricing, the Shining Rock Classical Academy transaction garnered interest for more than $1 million through HJ Sims’ exclusive, Private Wealth Management distribution network. The HJ Sims institutional sales team engaged with more than 50 institutional investors resulting in participation by 9 of those institutions and a 3x oversubscription of available bonds. An over-subscription of 3x allowed the HJ Sims team to reduce the interest rates during pricing, resulting in a 10 basis point reduction in the True Interest Cost, equivalent to approximately $20k in Annual Debt Service.
The tax-exempt bonds had coupons ranging from 5.625% to 6.125%, accompanied by yields ranging from 5.625% to 6.20%. The 35-year term bond had a 6.125% coupon at a yield of 6.20%. The taxable term bonds with a 2031 maturity had a 6.375% coupon at par.
On August 30, 2022, HJ Sims closed on the $21.395 million Series 2022 Bonds with approximately $1 million of the issue purchased by HJ Sims’ Private Wealth Management clients and the remainder purchased by 9 institutional bond funds. Shining Rock Classical Academy now owns its permanent facility on the Russ property, which will continue to provide educational space for K-12 students.
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