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Fulton Science Academy Bonds Downgraded
The failure of Fulton Science Academy Middle School to get a state charter led to the latest drop to a 'C' rating.
The revenue bonds that funded purchasing this proposed campus site on Fanfare Way were downgraded, and the ratings service Fulton Science Academy contracted warned default is possible.
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Fitch Ratings again has downgraded the rating on the $18.9 million in bonds for Fulton Science Academy to "CC" from "B," according to BusinessWire.
Fulton Science Academy Middle School's failure to get either a charter renewal from Fulton County or a state charter led to the downgrade of the Development Authority of Alpharetta educational facilities revenue bonds.
Fitch said in the release that lack of management cooperation left it unable to determine if the middle school's proposed conversion to a private school was feasible, and its possible effects on the Fulton Sunshine Academy and Fulton Science Academy High School. All three schools are obligated for the bonds.
Fitch won't be issuing analysis or further ratings because Fulton Science Academy's management said it won't be participating in the process.
The ratings service release gave three main reasons for the downgrade, starting with its opinion that default appears probable because the middle school has no statutory recourse to remain open as a charter school beyond June 30. Its closure would likely result in an immediate event of default as defined in the loan agreement for the bonds, the release said. The trustee could implement accelerated redemption provisions.
As Fulton Science Academy Middle School has no statutory alternative to get a charter by June 30, Fitch said "This violates a covenant in the loan agreement between FSA and the issuer. The loan agreement specifies that any violations of covenants are events of default."
If it goes into default, Fitch doesn't think Fulton Science Academy could cover the debt.
According to a March 31, BNY Mellon statement of accounts, $13.1 million of the $18.9 million in bonds remained. Fulton Science Academy told the state Board of Education in a letter that it estimated $1.5 million in cash reserves were available at all three schools as of May 4.
"Should the bonds become immediately due and payable, Fitch does not believe FSA could immediately liquidate resources to fill the $4.3 million gap," the release said.
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Fulton Science Academy Middle School
1675 Hembree Rd, Alpharetta, GA -
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Fulton Science Academy High School
4100 Old Milton Pkwy, Alpharetta, GA
There are none so blind as those who will not see
3:42 pm on Wednesday, May 16, 2012
Interesting to see what this researcher says about Fulton Science Academy. Watch
http://www.youtube.com/watch?v=pGU_Y7gZctQ OR google "charters privitization of education gulen schools in the US Sharon Higgins" then fast forward to 20:08 if you only want to see the part about FSA.
tom deeb
2:12 am on Friday, June 8, 2012
Bob,
I have a question -- there are reports in the media that Alpharetta has stated that teh bond defalut in no way impacts the tax payers of the City as it was not backed by the city.
Further the legal firm for Fulton County schools, Brock ..., has stated that Fulton County Schools is not responsible either instead this is an investor issue.
So why since October of last year has Dr. Avossa been claiming that Fulton County Schools would be held to account for the bond and therefore this was one of the main reasons for denial of the Charter?
So why did Loe Erste make similar claims that the State would held responsible for the bond.
Did everyone forget to ask their lawyers???
MarkMunoz
9:47 am on Saturday, June 16, 2012
Soon hopefully the truth will be out in many more states. Your sister schools in Tennessee where just denied and their affilation with an international cult. Willie Herenton the ex-mayor of Memphis didn't fair as well as Albers did on this one. But you must admit some interesting things came out of Alber's background and his campaign contributions from those associated with FSA (to no avail). Because this loan was obtained under false pretenses (while the school knew there was a denial on the table) Wells Fargo had the right to call back the loan and Fitch and others certainly have the right to downgrade FSA as a risk in light of all of their past 10 years of problems that they cannot seem to get past.
Maybe asking lawyers is a good thing, but before you pay a retainer to an attorney make sure you look what happened in the past with this group. Spending $$ of education money on lawyers only to lose. Check out Lotus SChool of Excellence, State Board denial and the lawyer that was unable to do anything except take money. If that is not compelling enough, check out your other "sister" school that was closed in Louisana. Abramson Science and Technology was closed amid bribes, sex scandal, abuse of American teachers. The RSD (Recovery School District) took over the school, the school and this "group" then hired an attorney to get a restraining order against the school district. Of course, it was laughably thrown out of court but the lawyer made off with $$$.