Local Initiatives Support Corporation

Charter School Bond Issuance: A Complete History

June 2011

Charter School Bond Issuance: A Complete History

Written By Elise Balboni Wendy Berry Charles Wolfson June 2011

Published By The Educational Facilities Financing Center of Local Initiatives Support Corporation www.lisc.org/effc This publication and related resources are available at http://www.lisc.org/effc/bondhistory LOCAL INITIATIVES SUPPORT CORPORATION EDUCATIONAL FACILITIES FINANCING CENTER Local Initiatives Support Corporation (LISC) is dedicated to helping The Educational Facilities Financing Center (EFFC) at LISC supports community residents transform distressed neighborhoods into healthy and quality public charter schools in distressed neighborhoods. LISC founded sustainable communities of choice and opportunity — good places to work, the EFFC in 2003 to intensify its national effort in educational facilities do business and raise children. LISC mobilizes corporate, government and financing. The EFFC pools low-interest loan and grant funds and leverages philanthropic support to provide local community-based organizations with: them for investment in charter school facilities in order to create new or renovated school facilities for underserved children, families and ■■loans, grants and equity investments neighborhoods nationally. Since making its first charter school grant in ■■local, statewide and national policy support 1997, LISC has provided over $100 million in grants, loans and guarantees for approximately 140 schools across the country. The EFFC fosters long- ■■technical and management assistance term sustainability of the charter sector by identifying replicable financing mechanisms and sharing best practices and data through publications such LISC is a national organization with a community focus. Our program staff as the Landscape series and this report. The EFFC is supported by the Bill are based in every city and many of the rural areas where LISC-supported & Melinda Gates Foundation, The Goldman Sachs Group, Inc., JPMorgan community development takes shape. In collaboration with local community Chase Bank, Prudential Financial, the U.S. Department of Education and the groups, LISC staff help identify priorities and challenges, delivering the Walton Family Foundation. most appropriate support to meet local needs. LISC is Building Sustainable Communities by achieving five goals: The EFFC assembled a National Advisory Board to provide oversight and leadership of its strategic mission, resource development, public ■■Expanding Investment in Housing and Other Real Estate policy activity and other issues relevant to the attainment of its mission. ■■Increasing Family Income and Wealth The Advisory Board is comprised of representatives of the community development, education, finance and philanthropic communities. ■■Stimulating Economic Development

■■Improving Access to Quality Education

■■Supporting Healthy Environments and Lifestyles

Since 1980, LISC has marshaled $11.1 billion from thousands of investors, lenders and donors. In urban and rural communities nationwide, LISC has helped to finance the construction or rehabilitation of 277,000 affordable homes and 44 million square feet of retail, community and educational space — totaling $33.9 billion in development. For more information about LISC, visit www.lisc.org. EFFC ADVISORY BOARD ACKNOWLEDGEMENTS JIM GRIFFIN We want to acknowledge the people who contributed to our research for President this study. In particular, we would like to express our gratitude to Thomas Colorado League of Charter Schools (Chairman) Carroll, Foundation for Education Reform & Accountability; Jeff Cohen, Jefferies & Company; Allison Consoletti, Center for Education Reform; MARGARET ANADU Howard Cure, Evercore Wealth Management; Thomas Jacobs, formerly Vice President, Urban Investment Group of Jefferies & Company; and John Snider, Megan Wienand and William The Goldman Sachs Group, Inc. Wildman, RBC Capital Markets. JOHN KINGHORN We would like to extend special thanks to the Bill & Melinda Gates Vice President Foundation for its support for this research, but acknowledge that the Prudential Social Investments findings and conclusions presented in this report are those of the authors CARMEN MALDONADO alone and do not necessarily reflect the opinions of the foundation or the Director of Real Estate individuals acknowledged above. KIPP: Knowledge is Power Program Finally, we would like to thank our EFFC colleagues Ariel Behr, Reena Bhatia SAMIR K. PATEL and Kathy Olsen for their editing prowess. Managing Director Tremblant Capital Group MICHAEL RUBINGER President and Chief Executive Officer LISC ANNE STOEHR Program Officer Walton Family Foundation (ex officio) TODD ZIEBARTH Vice President, State Advocacy and Support National Alliance for Public Charter Schools Charter School Bond Issuance: A Complete History

Table of Contents

Executive Summary...... 1 Methodology...... 3 Introduction...... 5 Need for Facility Financing...... 5 Advantages of the Tax-Exempt Bond Market...... 5 Projected Growth in Demand...... 5 Factors Affecting Borrowing Costs...... 5 Issuance Trends...... 6 Growth in Bond Issuance...... 6 Rated versus Unrated Issuance...... 6 Pricing...... 8 Costs of Issuance...... 9 All-In Cost...... 9 Factors Affecting Borrowing Costs...... 10 Rating...... 10 Coupon Type...... 13 Credit Enhancement Type...... 14 Use of Proceeds...... 15 Bond Term...... 16 State...... 16 Underwriter...... 18 Repayment Performance...... 19 Default Rates & Characteristics...... 19 Best Practices in Credit Analysis...... 20 Recovery...... 20 Non-Monetary Defaults...... 20 Conclusion...... 21 Challenges Ahead...... 21 Path Forward...... 22

Appendix A: Tax-Exempt Bond Financing Terminology...... 23 Appendix B: Long-Term Bond Rating Scales...... 26 Appendix C: Charter School Bond Issuance...... 27 Appendix D: Defaulted Charter School Bonds...... 52 EX ECUT of charter schools have accessed the market for their permanent facility financingneeds. themarketfortheirpermanentfacility accessed have schools of charter To principalrepaymentperiods. exempt interestratesandlonger fewerthan8% date,however, bond marketwithitstax- financing,ademandthatiswellmetbythetax-exempt facility reform.This demandforaffordable driven education school growthwillgenerategreatercharter onresults- placed have thatpolicymakersatalllevelsofgovernment to theheightenedfocus toincreasedue exceeding5,000—isexpected —now thecountry across schools of charter thanafragmentednichemuch forhighyieldinvestors.The more growthrateinthenumber andhasemergedas ofthemunicipalmarketcontinuestogainsizeandmomentum sector school completedtodate,thecharter transactions bond tax-exempt With approximately500 IV E SUMMARY first time: andforthe sector, bond tax-exempt 13-year school ofthecharter history Thistransparency hasbeenlacking. data-rich compendiumexaminesthe municipalmarketdatasystems,such identified orsegregatedinthevarious beenuniformly not issuanceshave school municipal marketandcharter are relativelynewtothe schools charter Because borrowers. school investorsandcharter forboth to providegreatertransparencythesector In thiscontext,CharterSchoolBondIssuance:ACompleteHistory ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ details the credit characteristics ofthedefaultedtransactions. details thecreditcharacteristics and borrowers school Examines therepaymentperformance ofcharter offering documents. with publiclyavailable or“All-In cost, Calculates thetrueborrowing forfixed-rateissues Cost,” maturities. forselect Index (MMD) as wellcoupon,yieldandspreadtothetriple-AMunicipalMarketData of issuance, discount and at costs scale, including underwriter’s available been previously thathasnot Provides andpricinginformation cost rating,creditenhancement,termand underwriter. jurisdiction, Tracks dataforall478 basicbond issuer, issues,includingparamount, throughyear-end2010. schools charter byapproximately400 undertaken totalingover$5billion transactions Identifies theuniverseof bond 478 school ratedandunrated charter serves serves 1 Executive Summary 2 Executive Summary among others.Severalsignificanttrendsemergefromtheseanalyses. among termandjurisdiction, ofcreditenhancement,bond the issue,rating,type includingthetimingof offactors, pricing isprovidedbasedonavariety and andtheircost in-depthanalysisofthesetransactions In addition, ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ underwriter’s discount of 2.36% included in those costs. includedinthose discount of 2.36% underwriter’s 6.02%,withanaverage ofissuanceaveraged Costs par amount. ofissuancemeasuredasapercentagetheissue’sand costs discounts trendinunderwriting there hasbeenadeclining borrowers, district school fortraditional stillmuch higherthantypical Although canafford. many schools pushingthelimitsofwhat ratedofferings,andarenow spreads forlower ofcredit enhancementandwider since thecreditcrisis,duetolack of7.18%Cost increased have overthe13-year All-InCosts period. borrowed atanAll-In schools forfixed-rate issues, charter On average double-Bratedandunratedofferings. both basispointsfor basispoints (bps),withspreadsofover300 roughly 240 In2010,fortriple-Bratedissuancesaveraged 2008. thespreadtoMMD sincethecreditcrisisbeganin ratedandunratedbonds levels forlower tohistoricallyhigh remainedclose have Spreads tothetriple-AMMD schools. for charter ininterestannually million $90 translatingintoanadditional borrowers, ininterestthantriple-Aratedmunicipal full percentagepointsmore paidtwo have schools charter Onaverage, rated municipalborrowers. arepayingsignificantlyhigherinterestratesthanhighly schools Charter gradedouble-Bcategory. non-investment and22% hadratingswithinthe were assignedratingsof“BBB-/Baa3” 57% of creditenhancement,20%wereassignedratings“BBB/Baa”, benefitfromanyform ratingsthatdidnot bond Of the138 school charter themarketonanunenhancedbasis. access must now schools charter insurers,most and duetothecollapseofmunicipalbond hadsomeformofcreditenhancement, Only 21%ofthetransactions issues. graderatingsand14with non-investment defaultsonthe251 unrated withinvestmentgraderatings,onedefaultonthe31issues bonds school Of the478 defaultsonthe198 therewereno charter transactions, the numberofissuesin2010. Standard of &Poor’s 60% (S&P),theratedsharehasincreasedtoabove assigned byFitch Ratings (Fitch), (Moody’s) Moody’s or InvestorsService ofthe478spreads. While 48% issueshadratings school charter yearsduetowidercredit ofofferingsinrecent number andparamount ofthetotal representanincreasinglylargerportion Rated transactions issuance. There bond school hasbeenaclearupwardtrendofcharter would reduce aggregate public outlays for public school facilities. reduceaggregatepublicoutlaysforschool would it operatingdollarsintheclassroom, enablingthemtospendmore schools, onlybeinvaluabletocharter not would environment. The resultingsavings governmental creditinatightfiscal an extremelyefficientuseofasuperior be would schools appropriated fundstoreduceinterestexpenseforcharter thatusebalancesheetpledgesratherthan credit enhancementprograms ofstate,municipalorfederal structures,expansion withtax-backed directly facilities ofpubliclyfinancingschool charter inefficient system.Short toaddressthisinequitableand this istheidealtimeforpublicsector efficientlyinadifficultfiscalenvironment, use scarcepublicresourcesmore ofthenation’s systemandtheneedto improve thequality publiceducation publicmandateto system.With themounting results fromthistwo-tiered dollarswhich pointedouttheinefficientuseoftax districtshave school and proponents,taxpayers school rates withpublicdollars.Manycharter Yet, districtcounterparts. than theirschool paythesehigher schools charter debt theypay significantlyhigherinterestratesonfacility authority, taxing pledgetiedto per pupiloperatingrevenueratherthanageneralobligation facilities with financetheir schools charter arefinanced.Because facilities school charter regardinghow discussion theongoing willfurther report inthis documented We information alsobelievethatthepricingandcost resemblethatoftheratedmunicipaluniverse. closely more futuredefaultratesto weexpect maturesector, credit analysisinamore risk.Giventhetrendtowardissuanceofrateddebtandimproved school or purchased byinvestors familiarwiththefundamentalelementsofcharter undercurrentstandards beunderwritten not would defaulted transactions intermsofcreditanalysis.Anumberthe has beenalearningcurve there aswithanynewsector, grade ratinghasdefaulted.Furthermore, assignedaninvestment bond school Nocharter and 0.1%,respectively. ofdebtoriginated,defaultratesforratedissuesfallto0.4% par amount was 3.1%intermsofthenumberissuesand2.4% asawhole While thedefaultrateforsector failedtransaction. each revealingastheydetailthecircumstancesfor analysis areparticularly alike.Thewill behelpfultoinvestorsandborrowers defaultstatisticsand We thattheincreasedtransparencyprovidedbythisreport arehopeful as a percentage of the par amount of the bonds. Because ofitssize Because ofthebonds. as apercentageoftheparamount ofissuance,which werecalculated discountandcosts underwriter’s we were abletogatherdataon documents, From thedisclosure ofthesamematurity. pricing oftriple-Amunicipalbonds comparedtothe basedonthepricingofthisbond the spreadtoMMD with offering,together ofeach termbond coupon andyieldforthelongest TM3,wewereabletodeterminethe Employing and pricinginformation. ofcreditenhancement,ifany,weincludecost ratingandtype jurisdiction, issuer, data,such asdateddate,paramount, tobasicbond In addition andMuniFilings. EMMA inBloomberg, material eventnotices 1 Webonds. thislistbychecking CUSIP developed school alsoidentifiedacomprehensivelistofdefaulted Wecharter have Academy Bonds. BondsorQualified Construction Zone America Bonds,QualifiedSchool such asBuild creditbonds, offeringsornewertax includefullytaxable not offering.The foreach datadoes calculations andcost in theparamount areincluded series, andboth seriesandasmalltaxable of atax-exempt often consist These transactions statement waspublishedordisclosed. 2010,no official where includingasignificantnumberoftransactions 31, throughDecember executed facilities school forcharter transactions ofprimarilytax-exempt of publicofferingsandprivateplacements theentireuniverse identifiedvirtually We areconfidentthatwehave elsewhere. available readily not togatherinformation directly schools instances, wecontacted Incertain schools. thatprovideinterimfinancingfor charter organizations ratingagenciesandnonprofit weobtaineddatafromunderwriters, addition, In bonds. school andotherfrequentissuersofcharter Authority Facilities andCultural Educational theColorado FinanceAuthority, School Charter fromconduitissuers,such astheUtahState information sought borrower L.P.Monitor (TM3),Bloomberg andMuniFilings.We (Bloomberg) also Thompson MunicipalMarket (SDC), DataCorporation Securities (EMMA), Board’s Rulemaking MunicipalMarketAccess Electronic Municipal Security expansivedatasets.Oursourcesincludethe withthemost together issuance, ratedandunratedbond issuancestodate,includingboth bond school comprehensivelistingofcharter includesthemost this publication issuanceinLISC’s bond 2010Landscape school charter —webelieve been publishedoverthepastfewyears—includingananalysisofrated financinghave facility school oncharter While severalotherreports METHODOLOG

(including letters and numbers) that uniquely identify a company or issuer and the type ofsecurity. (including lettersandnumbers)thatuniquelyidentify acompanyorissuerandthetype The andmunicipalbonds. companies andU.S.government numberconsistsofninecharacters ofallregisteredU.S.andCanadian includingstocks securities, most asidentifiersfor serve numbers CUSIP Identification standsforCommittee onUniformSecurities Procedures. CUSIP Y 1 identifiersagainst skews the resulting average insomemanner. skews theresultingaverage willbediscussedonlyasareminderortotheextentthatit in theaverages Forsubsetsofthedata,numberdatapointsemployed transactions. intheaggregateforrated,unratedandall summarizes thisvariation inthemunicipaldatasystems.The tablebelow andavailability documents intheoffering disclosure of datapoints,dependingonapplicability, number Averages arebasedonavarying thereport referencedthroughout figures. ratherthandefinitive costs estimatesforoverallborrowing considered close be borrowers. Assuch, theyshould or verified withindividualunderwriters been not They have had smallinconsistenciesorincompletedisclosure. cases which incertain intheofferingdocuments, based oninformation toinvestors.These were calculations thedateddateanddelivery between accrued time ofissuance,aswelladdinginanyinterestthatmayhave atthe discountoraddinginanypremiumonthebonds any additional oftheoffering,subtracting ofissuancefromtheparamount and othercosts discount theunderwriter’s The targetvaluewascomputedbysubtracting thatcomprisetheoffering. withindividualserialandtermbonds associated schedule fortheissueandcoupons based ontheprincipalamortization wascalculated fortheissue.Debtservice orAll-InCost, cost, borrowing semi-annual paymentstructures,wewereabletocalculatethetrue typical available officialstatementsand For fixed-rateissueswithpublicly adjust. inamannerforwhich wecouldnot documents issuance inthedisclosure of aggregatedwithincosts managementfees,areoccasionally construction unrelatedtoissuance,such asappraisalexpensesand real estatecosts thatancillary however, benoted, Itshould graphs includedinthisreport. tablesand ofissuanceinthevarious oftotalcosts component andaspart discountisanalyzedasaseparate theunderwriter’s and importance, Term All-In Cost Underwriter’s Discount(UD) Underwriter’s ofIssuance(COI) Costs (MMD+) Spread toMMD Coupon Yield Variable Number of Av a ila ble D Rated 206 208 232 224 221 198 210 ata P oint Unrated 248 206 239 229 215 219 216 s b y Vari Total 440 449 480 404 439 422 437 a ble 3 Methodology 4 Methodology available ontheEFFC’s website,http://www.lisc.org/effc/bondhistoryavailable . are withothermaterialfromthisreport, of appendicesCandD,together spreadsheets Downloadable includes detailsofthedefaultedtransactions. offerings,andAppendixD bond oftheindividualtax-exempt data foreach agencies areincludedinAppendixBforreference.Cincludes bythethreerating Appendix A.Theratingscalesemployed bond long-term isprovidedin issuance.Abriefreviewofthisterminology bond tax-exempt to specific This dealswithfinancingconceptsandterminology report and251 forunratedtransactions. transactions withapotentialtotalof232forrated number ofdatapointsto483, they aretalliedseparatelyinAppendixCandbringthetotalmaximum Assuch, pricing variedforthedifferentseriesinthesefivetransactions. and Cost borrowers. school differentcharter had distinctseriesfortwo threeoftheratedofferings aratedandanunratedseries.Inaddition, both ofthe478 thattwo benoted issuanceshad It should bond school charter increase inthefutureforseveralreasons: islikelyto schools bycharter The demandformunicipalmarketaccess fromschools. equity up-front issuance,andthereforerequireslittleorno withbond associated tofinance aswellexpenses theability schools costs, 100% ofproject financinggives bond tax-exempt leaserenewals.Inaddition, short-term ratherthan refinancingdeadlinesor achievement onacademic to focus administrators allowing andoverallfinancialposition, budgeting practices oftheschool’s financingalsocontributestothestability Such long-term resources. andreducetheannualdrainonprogram debt burdenonschools term.Longer fullyamortizing repaymenttermsminimizethe over alonger, lower rates canfixthese andschools duetotheirtax-exemption, loans commercial thantraditional arelower Interestratesonthesebonds schools. sourceoffinancingfor charter marketisanattractive bond The tax-exempt operators. hasbeenamajorchallenge forschool facilities andfinancing Asaresult,securing orpublicfundingforfacilities. facilities providepublic butdidnot schools ofindependentpubliccharter creation forthe reformallowed states,charter Inmost boards. chartering specialized groupsor universities,othernonprofit ofeducation, state departments districts, school bystate,andoftenincludelocal entities. These entitiesvary withstate-approvedauthorizing They orcontract, operateunderacharter, forstudentachievement. inexchange forincreasedaccountability schools public traditional thatgovern from manyoftherulesandregulations thatoperatewithfreedom areindependentpublicschools schools Charter INTRODUC ■ ■ A Need f P ■ ■ ro d students in 20 school districts. students in20school fivepublic school at least oneofevery districtsandserve seven school studentsin over30,000 serve schools charter Public Schools, Charter Alliancefor children withinthedistrict. AccordingtotheNational school eitherasignificantnumberorsubstantialshareofpublic serve There districtsinwhich schools charter areagrowingnumberofschool or 0.2%oftheoverallmarket. million, issuance totaledonly$935 school the municipalmarket,charter indebt,representing7.2% issued$31.4billion the healthcaresector of which numbered5,193hospitals, asofthe2010 census.While in2010 in theUnitedStates schools charter thangeneralmedical/surgical more To therearenow inperspective, putthepotentialsizeofsector market. bond viathetax-exempt borrowed or8%,have schools, charter However,todate,fewerthan400 thecountry. across jurisdictions studentsin41 1.7million serve schools charter Currently, 5,300 v anta jec or Fa ted Gro ges T cil ION of i the T w ty F th in Demand inancing a x - Ex empt Bond M ark et variety of factors, including: offactors, variety powers.These differencesaredependentupona cost unlimited taxing districtsthatcanofferinvestorstheir forschool thanthose schools charter thataremateriallyhigherfor costs interest ratesandoverallborrowing resultsin their perpupilrevenue.Thesecurity differenceinbondholder basedonarevenuepledgestructuretiedto mustissuebonds schools charter bonds, districtgeneralobligation issuanceofschool via direct themunicipalmarket thataccess publicschools In contrasttotraditional than $1,000onaperpupilbasis. more withonlythreeproviding forfacilities, per pupilfundingspecifically only11 law, withacharter stream. Ofthe41jurisdictions provideadditional throughthisoperatingrevenue andfacilities program theiracademic both essentiallyfinance charters programs, revenue tofundonlytheiracademic useperpupil districtschools Whereas traditional in thesamejurisdiction. districtschool comparedtoatraditional receives the percentageacharter and intermsoftheabsolutedollaramount revenue variesbystate,both asperpupilrevenue,basedonenrollment.Thisoperating funding,known public receive schools Charter capital fundstopayfortheirfacilities. andmustrelyontheiroperatingrevenueslimitedpublic authority taxing have donot schools districts,charter school Unlike traditional ■ ■ ■ ■ ■ ■ ■ ■ Fa ■ ■ ■ ■ ■ ■ ■ ■ Zuckerberg. founder,Mark Facebook Walton recently, Family and,most Foundation the namessuch astheBill&MelindaGatesFoundation, recognizable There from forthesector hasbeensignificantphilanthropicsupport networks. growthplansformanyofthelarger,high-performingcharter ambitious totheTopthrough initiativessuch asthefederalRace and program, schools charter forpromoting politicalsupport bi-partisan public schools, asviablealternativestotraditional schools ofcharter public acceptance toincreaseduegreater The growthrateisexpected school charter jurisdiction term bond strength andstructureofcreditenhancement,ifapplicable eitherfixed orvariable coupon type, presence andnatureofrating,ifapplicable atissuance general marketconditions c tors Aff ec t ing Borro wing Cos t s 5 Introduction ISSUANCE TRENDS

ANNUAL TOTAL CHARTER SCHOOL BOND ISSUANCE ($ in Millions)

$1,200 90

Par Amount 77 1000 71 75 $1,023 1200 Number of Issues $935 800 56 60 1000

600 41 45 37 38 800 $561 30 28 400 27 $460 26 30 24 600 $380 18 $361 $283 200 $262 $260 15 $200 $198 400 5 $15 $77 0 0 200 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

0 Growth in Bond Issuance Rated versus Unrated Issuance Through year-end 2010, the number of tax-exempt charter school Of the 478 issues, 229 were issued with ratings and 251 were unrated (two 90 transactions totaled 478, accounting for a par amount of just over $5 billion of the bond issues had both a rated and an unrated series). The 229 rated and averaging $10.5 million per issue. These transactions were undertaken issues had a total par amount of $3.25 billion and an average issue size 75 by approximately 380 obligors, with some schools refinancing prior bonds of just over $14 million. The 251 unrated issues had a total par amount of and some issues serving more than one school. With the exception of $1.76 billion and an average issue size of $7 million. While charter school 60 Michigan, which allows charter schools to issue tax-exempt bonds directly, bond issuance has generally been increasing each year, there has been a most charter school bonds have been issued through a conduit agency change in the relative composition of the sector in terms of rated versus authorized by the state in which the school operates. unrated offerings. Rated transactions represent an increasingly larger 45 portion of the total number of offerings, rising from the 40% to 50% range The volume of tax-exempt charter school bond issuance has increased from 2000 to 2006, to more than 60% of the total number of issues in 30 significantly since Concord Academy issued the first bonds in Michigan 2010. The increase in terms of the par amount is even more pronounced in 1998. Except for reduced market activity during the credit crisis of due to the relatively larger size of rated issuances. In 2010, the par amount 2008 and 2009, which affected all municipal sectors, there has been a of rated bond issuances represented 79% of the total par issued. 15 clear upward trend of charter school issuance. Calendar year 2010 saw a substantial rebound back to 2007 levels, with 71 executed tax-exempt The table on the following page summarizes annual issuance together with 0 charter school transactions, an increase of 173% from the prior year. In several cost and pricing variables. The analysis is further segregated into addition, average issue size has been steadily increasing and the range rated and unrated categories in order to highlight differences stemming of issue sizes has been expanding upward. In 2010, there were four bond from this key factor. issuances with par amounts above $50 million. Issuance Trends 6 Av era Year 2006 Year 2005 2009 2008 Year 2006 2005 2009 2008 2009 2006 2005 2008 2000 1999 1998 2002 2001 2003 2004 2004 2003 2002 2001 2000 1999 1998 1998 2004 2003 2002 2001 2000 1999 2007 2010 2007 2007 2010 2010 All All All ge A # ofIssues # ofIssues nnual Cos # ofIssues 251 229 478 45 38 30 36 34 20 41 22 21 26 41 21 28 24 14 71 56 13 15 18 18 19 16 18 10 10 10 27 77 10 37 27 18 17 17 5 3 0 5 Par Millions Par Millions Par Millions t & P $3,250.8 $3,250.8 $5,013.8 $1,763.0 $1,022.9 $360.5 $360.5 $460.3 $460.3 $269.6 $269.6 $935.4 $935.4 $259.9 $259.9 $261.5 $261.5 $291.0 $281.0 $233.2 $146.2 $233.3 $560.5 $283.0 $200.1 $190.5 $165.9 $198.4 $740.3 $164.0 $102.3 $153.4 $315.2 $195.2 $379.5 $227.2 $707.7 $46.7 $46.7 $96.1 $96.1 $92.5 $95.6 $95.9 $14.9 $79.5 $76.8 $14.9 $67.2 $9.6 $0.0 ricing All-In Cost All-In Cost All-In Cost 6.46% 10.16% 7.88% Vari 7.18% 8.68% 6.99% 5.68% 8.30% 8.89% 6.36% 6.61% 8.00% 8.92% 5.83% 6.94% 5.91% 6.62% 8.00% 8.41% 6.75% 6.78% 5.73% 9.13% 5.72% 8.10% 8.10% 8.97% 6.12% 7.68% 7.98% 7.61% 7.38% 7.39% 7.59% 7.24% 7.22% 7.21% 7.84% 7.55% 7.72% 7.17% - a bles 5.31% 6.02% 6.72% 4.44% 8.09% 4.60% 5.50% 4.90% 4.96% 6.68% 6.66% 6.86% 5.22% COI 5.54% 4.29% COI 6.84% 4.34% 6.42% 6.83% 6.21% 5.62% COI 6.78% 4.79% 5.71% 5.14% 4.57% 6.57% 5.97% 9.16% 5.10% 6.97% 8.11% 4.16% 6.97% 9.16% 5.11% 7.66% 7.61% 7.76% 7.27% 7.74% Unrated Issuance RatedIssuance Total Issuance - 2.36% 3.02% 1.73% 2.80% 3.60% 3.59% 3.59% 1.90% 1.86% 1.88% 1.36% 1.90% 1.99% 1.90% 2.50% 2.69% 2.49% 5.00% 3.54% 3.33% 1.53% 1.62% 1.91% 2.02% 2.26% 2.00% 2.41% 2.52% 5.00% 2.91% 3.55% 1.55% 3.67% 2.14% 2.70% 1.77% 2.10% 3.27% 2.97% 1.74% 1.17% UD UD UD - Coupon Coupon Coupon 6.06% 6.61% 7.09% 6.98% 6.63% 5.36% 5.50% 5.59% 5.39% 6.98% 6.09% 6.96% 6.09% 6.81% 8.29% 6.41% 6.82% 6.91% 6.84% 8.26% 5.81% 6.81% 6.53% 6.23% 6.95% 6.79% 5.71% 5.16% 6.74% 6.17% 7.63% 7.85% 7.46% 7.93% 7.84% 7.84% 7.22% 7.07% 7.57% 7.72% 7.11% - 6.05% 6.59% 7.08% Yield Yield Yield 6.99% 6.36% 6.65% 5.30% 5.45% 5.65% 6.99% 6.98% 8.04% 5.34% 6.32% 5.53% 6.82% 6.62% 6.83% 8.32% 6.02% 6.01% 6.24% 6.78% 8.55% 5.79% 6.55% 5.10% 6.97% 7.30% 7.63% 7.09% 7.85% 7.06% 7.89% 7.03% 7.92% 7.20% 7.03% 7.26% 7.67% 7.97% - MMD+(bps) MMD+(bps) MMD+(bps) 204 251 154 240 299 299 265 362 236 231 204 328 332 233 221 220 165 314 150 255 267 190 313 141 134 181 211 104 312 164 152 211 129 211 107 197 175 85 82 95 77 - Term (Years) Term (Years) Term (Years) 28.8 28.3 27.8 30.4 30.6 30.2 30.8 22.5 21.6 25.8 26.4 25.8 29.5 29.9 28.6 28.2 28.4 28.9 28.4 29.5 28.5 29.7 29.2 28.1 28.8 28.9 22.5 24.5 28.9 29.4 27.5 27.1 27.8 27.2 27.2 27.4 27.0 27.3 27.0 27.5 27.5 - 7 Issuance Trends Pricing As a sector, charter school bonds, even those with investment grade respectively. The chart below shows average annual spreads to the triple-A ratings, are generally sold to the municipal market with higher interest rates MMD for rated, unrated and all charter school transactions based on the than other revenue bond sectors, such as higher education, independent yield of the longest term bond. After several years of narrowing, spreads schools and healthcare. Much of the difference in this cost of capital is began to widen again in 2008 in response to the global credit crisis. related to the relative immaturity of the sector and the lack of data and Spreads peaked for all three categories in 2009. Rated charter bond issues track record that naturally characterize younger sectors. Over the past priced an average of 313 basis points above MMD and unrated transactions 13 years, the average fixed-rate bond yield on the term bond with the priced an average of 362 basis points higher, resulting in a combined longest maturity, which averaged just over 28 years, was 6.59%. For rated average of 328 basis points higher for the sector as a whole. While spreads transactions, which ranged from below investment grade to triple-A insured narrowed in 2010, a period of significant charter school bond issuance, they issues, the average falls 54 basis points to 6.05%. Not surprisingly, for remained well above historic levels. unrated transactions, the average increases 49 basis points to 7.08%. The net effect of the wide spreads between highly rated municipal bonds This higher cost of capital is measured by the spread to the triple-A MMD, and lower rated bonds is that average interest rates for charter school the interest rate differential measured in basis points between highly rated, bonds are significantly greater than most other municipal bonds. These triple-A municipal bonds and lower rated bonds. There has been significant higher rates translate into increased debt service expense for schools and volatility in charter school bond transactions in relation to MMD. The spread more money put towards facility expenses rather than core educational has averaged 204 basis points for all transactions, with an average spread programs. of 154 basis points and 251 basis points for rated and unrated transactions,

AVERAGE ANNUAL SPREAD TO MMD (Basis Points)

400 Rated Issues All Issues Unrated Issues 350

300

250 400 400

200 350 350

150 300 300

100 250 250

50 200 200

0 150 150 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 100 100

50 50

0 0

400 Issuance Trends 350 8 300

250

200

150

100

50

0 Costs of Issuance

AVERAGE ANNUAL COSTS OF ISSUANCE AS A PERCENTAGE OF PAR (Including Underwriter’s Discount)

10% All Rated Unrated 10 8 10 8 6 8 6 4 6 4 2 4 2 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2 0 In addition to the interest a charter school pays for its borrowing, like other 0 municipal bond borrowers, charter schools must bear certain costs in order school issuance. There was a general decline in average All-In Costs from to access the market, including legal fees, trustee fees, underwriter fees, 8% in the first year charter schools accessed the municipal market until and rating and credit enhancement fees, where applicable. The closing the low of 6.12% in the peak volume year of 2007. However, like many fee that has the most variance and represents a significant portion of total lower rated municipal securities, charter schools were greatly affected by 10 10 closing costs is the underwriter’s discount, the fee paid to the underwriter the credit crisis in 2008, with market access extremely limited and rates to structure, price and market bonds to investors. Costs of issuance near historic highs. Average All-In Costs rose significantly over this period, averaged 6.02% of the par amount of the offering, with an average to 7.21% in 2008, 8.30% in 2009 and 7.22% in 2010. 8 8 underwriter’s discount of 2.36% included in those costs. For the wide range of rated transactions, the average All-In Cost was 6.46%, 72 basis points lower than the average for all transactions. Rated These costs have been declining for charter schools. Average costs of 6 issuance hovered in the 6.5% to 7% range between 1999 and 2006 transactions followed a similar pattern of declining borrowing costs through 6 and fell to the 5% to 6% range between 2007 and 2010. While costs 2007, when interest rates began to rise and issuances were severely limited. of issuance and underwriter’s discount have remained fairly steady for For unrated transactions, the average All-In Cost increases by 70 basis 4 rated transactions, averaging 5.31% and 1.73%, respectively, there has points to 7.88%. The chart below depicts the average annual All-In Costs for 4 been a marked decline for unrated issuances driven in large part by a rated, unrated and all transactions. reduction in underwriting discounts. The average underwriter’s discount on 2 unrated bonds has fallen from 5% during charter schools’ first year in the 2 municipal market to 2% and below in recent years, with a corresponding AVERAGE ANNUAL ALL-IN COST 0 drop in aggregate costs of issuance from the 8% range to the 5% range 11% 0 All Rated Unrated in the latter part of the decade. The chart above depicts average costs of 10 issuance, with the share for underwriter’s discount represented on the base 9 portion and other costs of issuance on the top portion of each column. 8 11 All-In Cost 7 6

A school’s true cost of capital, or All-In Cost, is calculated by taking both Issuance Trends 10 interest expense and costs of issuance into account. The All-In Cost for 5 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 fixed-rate charter school bonds averaged 7.18% for the 13 years of charter 9 9

8

7

6

5 10 Factors Affecting Borrowing Costs lower for the more highly rated issuances, ranging from lows of5%or highlyratedissuances,rangingfromlows forthe more lower are All-InCosts beexpected, Aswould within themajorratingcategories. gradations page dividestheratedissuesintospecific the following thetableon andpricingeffects, capturecost accurately In ordertomore ofissues. amount thenumberandpar forboth bymajorratingcategories rated transactions The illustratethebreakdownofunratedand above piecharts category. graderatings withinthedouble-B remaining 31obtainednon-investment Of the138 unenhancedissues,107 andthe fellinthetriple-Bcategory, The 91ratingsforenhancedissuesallgarneredof“A” orhigher. ratings wereconsideredunenhancedbytheapplicableratingagency. guarantees,butthe benefited fromenhancementintheformofpartial publiclyrated.Three theywerenot others they wereprivatelyplaced, wereenhancedwithletters ofcredit,butbecause fivetransactions Another strength ofthecreditenhancementratherthanschool’s owncredit. werebasedonthe oftheseratings,approximately40%, Ninety-one beenrated. issuances,229,have bond school halfofallcharter Almost F R A ati C TORSA n g Unrated FF (251) 52% EC 1 Tax-exemptissuanceswithratingsfrommorethanoneagencyareshownusingthelowerofratings,whereapplicable. T NUMBER OFISSUES ING BORRO AGGREG 478 BBB/Baa AAA/Aaa 40% (70) (28) 6% BB/Ba (31) 7% BB/Ba 15% (27)

ATE C WINGOS C at

iSS 1 Current BBB/Baa HAR agency (107) 22% (44) uan 9% A TE are ratings AAA/Aaa Ce R SCHOOL 16% T shown AA/Aa (28) Other (18) S 0% 4% (1) are Charter ($ inMillions) (Including using 19% those (34) A the as

10% AA/Aa BOND (17) of lower SC issues that had insurance and no otherformofcreditenhancement.Asa issues thathadinsuranceandno were forthe41issuancesin“A” 22 reflects This highaverage category. ofissuance,8.14%, costs ofissuance.The line forcosts highestaverage There ratedtriple-Borlower. islessofatrend to the2%rangeforthose of roughlyapercentagepointforissuancesrated“A” increasing orabove, thesame generalpattern,withdiscounts discountfollows Underwriter’s was 6.85%. All-InCost theaverage rated issues,thelargestcategory, 2007, of6.94%.For“BBB-/Baa3“ average arelativelylow andthushave and ratingswereissuedin2006 issueswith “BB-/Ba3” Similarly, thetwo of4.52%. average andresultinginarelatively lower other ratingcategories, ofthe most in reflected thanthose just over22years,considerablyshorter average termof issuesthathadan two only reflects data. Thus, theaverage “AA-/Aa3,” wereissuedonafixed-ratebasiswithrelevantpricing onlytwo market timing.Forexample,whilethereweresixissuanceswithratingsof beenskewedbyasmall numberofissuancesor have some oftheaverages However, gradeissuancesinthedouble-Bcategory. for non-investment tohighsof7%andabove under inthetriple-Aanddouble-Acategories March enhanced

Other ($13) of 0% hool the IS 12, ratings, SU 2010, ($1,763) Unrated Bond ratings, A 35% and NCE where ($458) BB/Ba issuances 9% BY iSS applicable. where 1% (1) B R ue r PAR AMOUNT with ATING applicable) $5,014 ating ratings BBB/Baa AAA/Aaa

1 36%

($383) (65) from 8% S BB/Ba 14% 1 (25) more

BBB/Baa ($1,653) 33% than Current one ($561) 11% A Withdrawn ($183) 22% AA/Aa (38) 4% 22% (38) A

AA/Aa 5% (9)

of issuance. basedontheirratingsatthetime schools forcharter All-InCost average and spreadtothetriple-AMMD The depictstheaverage below chart was5.17%.category inthe“BBB-/Baa3” transactions school the one-thirdofratedcharter 10%above ofparfor15 ofissuancefor costs of theissues.The average ofissuance paidhigherinsurancepremiumsthatdrovecosts result, schools 3 2 1

AA/Aa2 AA+/Aa1 AAA/Aaa Rating All Other BB-/Ba3 BB/Ba2 BB+/Ba1 BBB-/Baa3 BBB/Baa BBB+/Baa1 A A+/A1 AA-/Aa3 “Other” was a short-term, variableratingfromMoody’s. wasashort-term, “Other” offeringissuedin2010.Data forsinglebond Variable-rate relevantdataforpricingvariables. issueswithno Av era 1,3 1 1 8% ge Cos 0 1 2 3 4 5 6 7 2 AAA Aaa / # ofIssues t & P 229 28 21 41 79 27 5 1 2 8 1 3 6 7 A Aa1 A+/ ricing Par Millions All-In Cost $3,250.8 $3,250.8 $382.9 $382.9 $288.1 $288.1 $720.4 $916.8 $527.1 $157.4 $34.5 $34.1 $51.0 $13.2 $15.9 Vari $12.2 $97.4 AV A Aa3 A-/ ER a AG All-In Cost bles 6.46% E ALL 5.06% 6.85% 6.49% 5.21% 6.94% 6.29% 4.52% 6.26% 7.22% 7.15% b A - - - y R -I N COST&SP at Spr 5.31% ing ead toMMD BBB+/ 3.36% 2.42% 5.28% 3.22% 5.04% COI 3.70% 4.76% 8.14% 3.72% 4.15% 5.17% 7.00% 7.64% Baa1 R years having adiverserangeofratingsandothersrelativelyfew. years having variesbyyear,withsome As thetableindicates,rangeofcategories withincategories. ratherthanbygradation into themajorratingcategories ratingsareaggregated Forgreateranalyticalsimplicity, intoaccount. factors The these pagetakesboth costs. tableonthefollowing borrowing school charter affected as indicatedbythepresenceandnatureofrating,have Both thetimingofissuanceandperceivedcreditstrengthoffering, Annual IssuancebyRating EAD BBB/ 1.73% Baa 0.96% 1.50% 2.29% 1.33% 2.00% 2.04% 0.75% 0.75% 1.75% 1.70% 0.78% 1.67% 1.27% UD TOMMD B Baa3 Coupon B+/ 6.06% 4.80% 6.06% 4.63% 5.00% 6.81% 6.62% 6.00% 5.56% 6.47% 6.19% BY - - - R ATING B Ba1 B+/ 6.05% Yield 4.80% 4.86% 6.89% 6.69% 6.05% 6.06% 6.48% 5.48% 6.21% 4.78% - - - Ba2 BB/ MMD+(bps) 154 209 233 199 198 179 178 30 96 25 11 - - - B Ba3 B-/ Term (Years) 28.8 30.0 30.3 28.4 29.7 29.4 25.4 29.6 25.5 28.3 29.8 19.6 27.6 27.4 11 Factors Affecting Borrowing Costs 0 1 2 3 4 5 6 7 8 0 1 2 3 4 5 6 7 8 12 Factors Affecting Borrowing Costs Av era Year Year Year 2005 2009 2006 2008 2006 2005 2009 2008 2009 2008 2006 2005 2004 2003 2002 2001 2000 1999 1998 2004 2003 2002 2001 2000 1999 1998 1998 2002 2000 1999 2004 2003 2001 2007 2007 2007 2010 2010 2010 All All All ge A nnual Cos Triple-A Triple-A Triple-A 5.06% 3.72% 5.05% 4.85% 4.99% 4.80% 3.90% 4.85% 5.41% 5.84% 3.20% 3.78% 4.71% 2.57% 4.13% 5.17% 30 48 43 32 20 22 12 8 ------t & P ricing Double-A Double-A Double-A 4.46% 4.75% 4.44% 4.60% 5.21% 3.42% 2.01% 6.55% 16 25 14 8 ------Vari a bles Spread to MMD (BasisPoints) Spread toMMD 6.26% 10.22% 11.57% 15.47% 11.47% 8.14% 6.49% 4.38% 5.88% 2.30% 5.50% 5.88% 5.61% 4.26% 6.00% 5.20% 5.97% 6.17% 7.41% 7.52% 7.15% 7.10% A A A 130 182 151 96 44 60 b 83 58 76 57 67 ------y R All-In Cost COI at ing Triple-B Triple-B Triple-B 4.90% 6.75% 8.38% 6.90% 6.85% 5.39% 4.60% 4.68% 6.29% 6.94% 5.23% 5.53% 5.92% 5.25% 4.34% 5.92% 5.22% 4.23% 4.75% 6.71% 4.79% 3.87% 5.74% 7.65% 7.22% 7.24% 194 244 340 166 104 151 167 167 116 178 117 174 76 - - - Double-B Double-B Double-B 5.07% 7.15% 6.44% 6.44% 9.98% 6.88% 6.94% 4.22% 3.22% 3.62% 8.95% 5.55% 8.14% 4.47% 6.77% 3.77% 6.17% 6.17% 7.89% 7.34% 7.91% 7.77% 213 466 305 245 241 233 149 168 207 184 270 ------Unrated Unrated Unrated 6.72% 10.16% 7.88% 8.68% 4.90% 8.89% 8.09% 6.61% 8.92% 8.00% 6.84% 4.34% 5.62% 6.75% 6.78% 9.13% 8.10% 5.97% 8.10% 9.16% 8.11% 7.68% 7.39% 7.66% 7.61% 7.76% 7.27% 7.74% 251 362 299 240 299 332 233 165 314 267 211 312 197 175 8.41% 8.30% 6.36% 4.96% 6.68% 6.66% 6.86% 6.21% 6.02% 5.71% 8.00% 8.97% 6.62% 4.57% 6.57% 6.97% 6.42% 6.83% 7.59% 7.21% 6.12% 9.16% 7.84% 7.72% 7.22% 5.11% 7.17% 7.18% All All All 265 255 204 328 220 236 221 141 190 150 211 211 152 164 Certain trends emerge when accounting for both market conditions and Coupon Type credit strength. The spread to the triple-A MMD has remained close to The large majority of charter school bond issues, 447, were issued on a historically high levels for lower rated and unrated bonds since the credit fixed-rate basis. Only 31, or 6%, were issued with variable rates. These 31 crisis began in 2008. In 2009, spreads to MMD averaged 340 basis points issues totaled $306 million. for triple-B rated issues and 362 basis points for unrated issues. The spread of 466 basis points in the double-B category represents a single issue that priced in the trough of the market in the first quarter of 2009. In 2010, NUMBER OF ISSUES BY COUPON TYPE the average spread narrowed somewhat for triple-B rated issues, falling to 244, but remained above historic averages. Double-B and unrated issues Variable- continued to price more than 300 basis points above MMD on average Rate during the year. Given the fact that in the current market, most charter (31) 6% schools must issue on an unenhanced basis with debt that is either unrated or that has ratings no higher than the triple-B category, these spreads are a cause for concern for schools in need of affordable, long-term financing. These higher interest rates are apparent in the All-In Costs schools have faced since 2008. While costs of issuance have experienced a general downward trend, particularly for unrated issuances, All-In Costs remain Fixed-Rate high. After peaking in 2009, with an average All-In Cost of 8.38% for (447) triple-B rated issues and almost 9% for unrated issues, All-In Costs have 94% remained close to 7% for triple-B rated issues and at approximately 8% for both double-B rated and unrated issues. These high costs are often not affordable for charter schools concerned with preserving the strength of their academic program.

Variable-rate issues normally entail lower interest costs, but are subject to interest rate risk at the time of reset. The 31 variable-rate transactions were generally issued with enhancement in the form of a letter of credit. On average, they had a slightly shorter term, 25.8 years, compared to 28.4 years for the majority of fixed-rate charter school issuances. Because of the variable nature of the interest costs, it is not possible to calculate All-In Cost from the offering documents available at the time of issuance. However, as detailed in the table below, underwriting discounts and costs of issuance tend to be significantly lower for these transactions because the underwriter generally accepts a smaller up-front fee in exchange for ongoing annual remarketing fees associated with variable-rate issues.

Average Cost & Pricing Variables by Coupon Type

Coupon # of Issues Par Millions All-In Cost COI UD Coupon Yield MMD+(bps) Term (Years) Variable-Rate 31 $306.3 - 4.74% 0.91% - - - 25.8 Fixed-Rate 447 $4,707.5 7.18% 6.08% 2.45% 6.61% 6.59% 204 28.4 All 478 $5,013.8 7.18% 6.02% 2.36% 6.61% 6.59% 204 28.3 Factors Affecting Borrowing Costs 13 14 Factors Affecting Borrowing Costs 1 average All-InCost benefited fromthisdualformofenhancementhadan strength withthatofaninsureratthetimepricing.The 26issuesthat district’sthrough enhancementthatcombinedastateorschool credit wereachieved Thecosts borrowing for comparisonpurposes. lowest forunenhancedofferings withinformation forms ofenhancement,together issuedwithvarious The forbonds includespricinginformation tablebelow themunicipalmarketonanunenhancedbasis. forcedtoaccess now allschools withalmost borrowers, school forcharter enhancement available thecredit issuancesnegativelyaffected school letters ofcreditforcharter insurersandthedowngradingofmanybanksproviding municipal bond As discussedextensivelyinLISC’s 2010Landscape, thecollapseof billion. issuance, approximately$1.38 for27% bond issues accounted school ofcharter ofthetotalparamount These Program,oftheabove. Facilities orsomecombination enhanced ofEducation’s the U.S.Department School CreditEnhancementforCharter orgranteesof guaranteesfrom foundations district,otherthird-party school pledge,aletterofcredit(LOC),pledgefrom obligation ageneral insurance,amoral with someformofcreditenhancement,includingbond or21%,ofthe478Ninety-nine, offeringswereissued bond school charter fortheschool. resulting insignificantinterestsavings school, forthatofthecharter credit strengthofthestateormunicipality substitutesthe its scheduled pledgeeffectively payments. Assuch, theMO isunabletomake school intheeventacharter payments tobondholders upontomeetdebtservice fundthathasbeendrawn reserve debt service outofgeneralrevenuestoreplenisha required, tomakeanappropriation not although islegallyauthorized, this pledge,thestateormunicipality onaregularbasis.With take advantageofthiscreditenhancementtool beenableto have schools charter onlyColorado although revenue bonds, school withcharter pledge)inconnection pledge(MO obligation of amoral offerings.Twobond theuse andIndiana,statutorilyallow states,Colorado their secure utilizedcreditenhancementtofurther have schools charter interestrates,many highercreditratingsandlower In ordertoachieve Credi

Insurance Insurance/Pledge Enhancement Two issueshadenhancedandunenhancedseries. Moral Obligation Letter ofCredit Other Unenhanced All Av 1 era t Enhan cement T ge Cos t & P # ofIssues 480 ricing 381 26 26 28 14 5 ype Vari Par Millions $5,013.8 $3,637.1 $349.8 $349.8 $284.7 $134.2 $416.2 $191.8 a bles All-In Cost b 7.18% 4.96% 6.23% 6.21% 6.34% 6.10% 7.49% y Credi t Enhan cementT 6.02% 10.13% 3.49% 4.99% 3.48% 3.76% 6.10% COI offerings thatwereissuedonafixed-ratebasis. bond two reflect forletterofcreditenhancedtransactions the tablebelow includedin relevantpricingdata.Thewere variable-ratewithno averages enhancedwithlettersofcredit,26 transactions Ofthe28bond the bonds. ofissuanceinexcess10%insurance hadcosts of oftheparamount issuessoldsolelywith Fifteenofthe26bond levels, increasingAll-InCost. premiums. These ofissuancetoextremelyhigh premiumsdroveupcosts ofhighinsurance expensivesideoftheenhancedissuesbecause the more fellon However,theseinsuredtransactions of unenhancedtransactions. thanthat than apercentagepointlower more All-InCost had anaverage The othercreditenhancement, 26issuesthatwereinsured,buthadno andothers. recipients federal creditenhancementprogram and 2010 guaranteesfromfoundations, andwereenhancedwiththird-party inlate2009 wereprimarilyclosed offunds.These cost transactions lowest fees. The formsofenhancementhadthenext fiveissuanceswith“Other” ofissuanceandunderwriting lower costs of lessthan5%andsignificantly NUMBER 2.36% 1.45% 2.65% 1.92% 1.04% 1.64% 0.95% UD OF Unenhanced ype IS Coupon 6.61% 5.65% 5.85% 6.86% 5.29% 4.93% 6.10% (381) 79% SUES BY 6.59% 5.65% 6.85% 5.21% 6.03% 5.95% 4.77% Yield CREDITENHANCEMENTTY (28) LOC 6% MMD+(bps) 204 230 163 152 31 25 55 Insurance (26) 6% Term (Years) Insurance/ 28.3 30.3 30.1 28.2 25.2 28.5 Pledge 27.0 (26) 5% Pledge Other MO (14) 3% 1% (5) PE BBB/Baa ($1,653) Unrated (1,763) 33% 35% ($561) 11% A refunding issues. New money issues averaged roughly 1.5% more inAll-In roughly1.5%more issuesaveraged refunding issues.Newmoney forthestraight issuesandlowest discount werehighestforthenewmoney ofissuanceandunderwriter’s costs theAll-InCost, beexpected, As would offerings, or4%ofallissuances. fortheremaining21bond information There publiclyavailable wasno tenissuesthroughColorado’s program. including another obligation moral 52 issues,or11%, andrefundingissues, newmoney werecombination Anadditional throughColorado’s program. obligation rates available moral lower interest bond debtthroughthe refunding issuesrefinancedprior halfofthe issues.Almost bond or 4%,werestraightrefundingsofprior Nineteenissues, purposes. or81%, were fornewmoney 386, schools, Of the478 beenissuedby,oronbehalfof,charter offeringsthathave bond except intheeventofdefault. anyexpenditureofpublicfunds, rateswithout atsubstantiallylower borrow to schools charter allow would ofprograms These loans. development types Act of2010, oreconomic which providesfederalguaranteesforcommunity establishedbytheSmallBusinessJobs financialinstitutions development forcommunity such astheguaranteeprogram expand federalprograms Fund managedbytheStateisto Athirdoption BoardofEducation. Permanent eligibleforguaranteesfromthe$23billion School schools beingconsideredinTexasenhancement program makecharter thatwould istouseotherpublicassets,such asthecredit option debt. Another school districtguarantees,forcharter orschool program obligation moral asinthecaseofColorado’sthe strongerstateormunicipalcreditdirectly, istoinvolve creditinatightfiscalenvironment.Oneoption governmental beanextremelyefficientuseofastronger would schools for charter sheet pledgesratherthanappropriatedfundstoreduceinterestexpense thatessentiallyusebalance or federalcreditenhancementprograms ofstate,municipal paywithpublicdollars.Expansion schools charter tousetheirstrongercreditreducetheinterest borrowers governmental highlyrated timeformore debt,itisanopportune paid forfacilities historically have schools andhigherrates charter Given thefiscalsituation Use of Av All Not Available Combination Refunding New Money Use era ge Cos P roceeds t & P # ofIssues 478 386 21 52 19 ricing Par Millions $5,013.8 $3,905.8 $3,905.8 Vari $768.1 $768.1 $202.8 $137.1 a bles All-In Cost 7.18% 6.46% b 5.79% 7.37% y Use of Na 6.02% 5.06% 4.34% 6.24% COI P Na roceeds marginal outlays are projected to increase going forward. toincreasegoing marginal outlaysareprojected With higherspreadsinthecurrentmarket,these triple-A ratedborrower. bya iftheirdebtwereundertaken yearthantheywould expense each ininterest more million arepayingroughly$90 schools points, charter of204basis spreadtoMMD students.Givenanaverage school charter buildingsforpublic toprovideschool interest expenseof$294million thistranslatesintoanannual of6.65%, cost borrowing weighted average issueswereforrefinancing.Ata assumes thathalfofthecombination exclusiveofrefunding.This oftheirfacilities, andrenovation construction acquisition, tofinancethe roughly$4.4billion borrowed have schools toestimatethatcharter uses,itispossible the magnitudeofvarious discount.Given apercentagepointhigherintermsofunderwriter’s almost ofissuanceasa percentage ofpar,and incosts nearly2%more Cost, Refunding 2.36% (19) 4% 2.44% 1.62% 2.11% UD Na NUMBER Combination Coupon 6.61% 6.52% 5.64% 6.07% 6.74% OF 11% (52) IS SUES 6.59% Yield 6.38% 6.04% 5.54% 6.74% BY USE New Money (386) MMD+(bps) 81% OF 204 181 101 155 217 P ROCEEDS Not Available Term (Years) 28.3 (21) 29.1 28.2 4% 27.6 27.6 15 Factors Affecting Borrowing Costs BBB/Baa ($1,653) Unrated (1,763) 33% 35% ($561) 11% A 16 Factors Affecting Borrowing Costs together with cost and pricing data. While Michigan had the most andpricingdata. While Michigan withcost hadthemost together offerings, bond school hadcharter issuances inall29 statesthathave The of pageliststhenumberandparamount tableon thefollowing issuances, or18% ofthetotal. bond school forthe remaining84charter 21 statesaccount An additional issuances, includingTexas, andPennsylvania. Utah,Minnesota,Florida than15 more bond have school charter issuances. Fiveotherstateseach for 262,or55%, ofthe478three statesaccount bond school charter with93,andthenArizona,73. byColorado, followed These is closely Michigan issuances, 96. bond school charter ithasthemost directly, bonds astheyarecalledinthestate,toissuetax-exempt academies school orpublic schools, charter thatMichigan allows tothefact Due inpart interestrates. lower having termbonds withtheshorter curve, yield traditional areconsistentwithamore coupons, yieldsandAll-InCosts 35 years— 30 to 30 yearsand significant numberofdatapoints—25to mainrangeswitha before2004.Forthetwo range, allofwhich occurred inthe10–15 Theredevelopment. werealsoonlythreetransactions year earlyinthesector’s theyoccurred primarilybecause expensive All-InCost most the issuancesoffiveyearsorlesshave small numberofshort-term The relatively factors. important beenmore mayhave and development indicatethatmarkettiming below theaverages rates andAll-InCosts, higherinterest tohave beexpected termswould While offeringswithlonger andpricing. oncost captureeffects accurately ranges inordertomore The dividesthe478 tablebelow issuesintoagreaternumberofmaturity halfoftheseissuanceshadtermsover19however, years. tenand20years; 20 issues,or4%,hadintermediatetermsofbetween Another to2006. prior andallbutoneoccurred in thesector’s history, in2000,early issuancesoccurred than tenyears.Halfoftheseshort-term Eightissuances,or2%,hadtermsofless issuances of20yearsormore. allofthe478Almost issuances,94%,werelong-term bond school charter Bond T State All Not Available 35-40 Years35-40 30-35 Years30-35 25-30 Years25-30 20-25 Years 15-20 Years 10-15 Years 5-10 Years <5 Years Term Av era ge Cos erm t & P # ofIssues 478 180 219 38 11 17 2 3 3 5 ricing Par Millions $5,013.8 $1,960.6 $1,960.6 $2,378.0 Vari $262.5 $120.5 $257.0 $14.9 $11.7 $3.7 $5.0 a bles All-In Cost 11.55% 7.18% 6.91% 8.94% 8.10% 6.47% 7.30% 7.22% 7.15% b Na y Bond T 6.02% 10.39% 5.60% 5.23% 6.01% 6.24% 8.83% COI 7.42% 7.78% erm Na lowest for charter schools. schools. forcharter lowest and2007 thatoverhalfwereissuedin2006 whenmarketrateswere fact of6.03%,largelyduetothe All-In Cost issuances hadanaverage school 11 thesamemagnitudeofissuance. Forexample,Illinois’ have not charter thanColorado’s; lower theydid All-InCosts however, states hadaverage duetotheState’s costs ratings andlower pledge.Afew obligation moral benefitedfromhigher two-thirds almost inColorado, 58 ratedtransactions ofissuanceswereunrated.Oftheremaining or38%, only35, Colorado, Incontrast,in issuances wereunrated,resultinginhighercapitalcosts. or67%, bond were unrated.Similarly,inArizona,49, school ofcharter or72%, issuances that69, bond ofMichigan school charter due tothefact offunds.This alsohadthehighestcost islargely issuances, itsschools Not Available 2.36% 2.59% 3.08% 2.03% 2.41% 4.00% 2.25% 2.19% 2.74% UD 0% (2) Na NUMBER 30–40 Years (230) Coupon 48% 6.61% 6.39% 6.48% 6.93% 6.75% 6.21% 6.95% 7.56% 7.07% Na OF IS SUES 6.59% Yield 6.38% 6.50% 6.93% 6.23% 6.71% 7.03% 7.75% 7.15% Na BY BOND 20–30 Years MMD+(bps) (218) 46% 204 249 281 185 185 307 213 179 274 Na TERM <10 Years 2% (8) Term (Years) 10–20 Years 28.3 (20) 4% 36.4 30.3 28.7 22.5 13.3 18.1 9.5 3.3 Na BBB/Baa ($1,653) Unrated (1,763) 33% 35% ($561) 11% A 2 1 conduitissuers. requiredbylocal approval isnormally tothatofWPFA’s council,inaddition such asacity Such secondary board. approvalbyapoliticalbody, requireasecondary doesnot approval process (WPFA), andits schools, without-of-statecharter towork isauthorized issuer’s fee.Arelativelynewissuer, theWisconsin Public Authority Facilities borrower paymentofthe benefit”toinclude interpreting therequired“local applied,andmanyissuersare loosely much more out-of-state issuerisnow borrower andan therequirednexusthatlinksa market.Specifically, bond the toobtaintheirapprovalaccess it easierforout-of-stateborrowers made recently on theirbehalf.However,anumberofconduitissuershave bonds usedout-of-stateentitiestoissuetax-exempt have three schools turnedtoout-of-stateissuers.To have schools a result,charter date, only asiscurrentlythecaseinNewYork schools, conduit forcharter As City. issuersortotheabsenceofalegallyavailable useofavailable school tocharter viaanin-stateconduitissuerduetopoliticalopposition borrow to schools for charter itisdifficultorimpossible jurisdictions, In certain Variable-rate relevantdataforpricing variables. issueswith no jurisdiction. ratherthan byissuer location beenclassifiedbyschool inArizona have Authority IndustrialDevelopment thatwereissuedthroughthePima County NevadaandOhio inDelaware, Three issuesforschools bond Av era State All NV NM MD GA WI AK IN DE NY DC ID MA FL MN UT NJ NC MO CA IL PA TX AZ CO SC RI OR OH MI 2 1 1 2 2 1 ge Cos # ofIssues t & P 478 30 96 21 93 73 27 37 10 10 11 17 1 1 1 2 2 3 6 7 9 4 4 1 1 1 1 1 4 4 ricing Par Millions $5,013.8 $596.2 $596.2 $290.4 $290.4 $603.4 $603.4 $351.6 $351.6 $834.8 $166.2 $256.4 $219.3 $121.3 $151.2 $217.3 $747.6 $44.8 $44.8 $20.9 $42.9 $84.4 $43.8 $33.2 $24.6 $41.8 $43.9 $13.7 $13.9 $17.2 $6.7 $8.4 $3.4 $7.0 $7.7 Vari a All-In Cost bles 7.18% 4.44% 6.30% 6.08% 6.68% 6.48% 6.48% 6.61% 5.54% 6.91% 6.42% 6.43% 6.03% 6.91% 6.97% 8.19% 8.11% 7.38% 7.36% 7.36% 7.59% 7.69% 7.00% 7.00% 7.76% 7.73% 7.07% b - - - y State 6.02% 6.44% 4.40% 4.68% 3.66% 3.42% 5.20% 6.84% 6.54% 6.24% 4.91% 6.84% 3.01% 4.84% 3.93% 6.01% COI 5.51% 6.71% 6.55% 4.78% 2.71% 6.72% 5.47% 9.15% 6.18% 4.74% 7.80% 7.76% 7.76% Na (21) 2.36% 4% FL (17) 0.90% 1.85% 2.85% 1.68% 1.50% 2.46% 0.90% 1.46% 3.65% 2.50% 0.46% 0.40% 0.81% 2.25% 1.03% 3.22% 2.83% 2.00% 1.58% 1.95% 1.75% 3.75% 1.70% 1.67% 2.72% 1.47% 2.10% 2.15% 4% 1.74% UD PA (27) MN 6% (30) 6% UT Coupon 6.61% NUMBER 4.50% 6.65% 6.60% 6.99% 6.65% 5.38% 6.40% 6.08% 5.63% 6.63% 5.04% 8.00% 6.42% 6.83% 5.64% 6.31% 6.25% 5.70% 6.71% 6.13% 6.77% 6.10% 7.00% 7.00% 7.25% 7.17% Other 18% (84) - - - (37) 8% TX OF 6.59% Yield 4.65% 6.59% 6.98% 5.68% 6.63% 4.93% 6.20% 5.24% 6.42% 6.03% 6.29% 5.75% 6.75% 5.79% 6.73% 6.70% 6.56% 6.67% 6.47% 6.18% 6.11% 7.25% 7.00% 7.00% 7.25% 7.70% IS SUES - - - 15% (73) AZ MMD+(bps) BY 204 20% (96) ST 330 235 209 265 204 221 225 233 222 201 233 252 234 284 199 169 256 152 215 147 157 157 137 MI 89 52 14 - - - ATE Term (Years) 19% (93) CO 28.3 30.2 30.0 35.3 30.6 30.0 30.0 30.4 30.4 26.7 29.9 24.7 26.8 26.6 31.8 28.3 25.9 29.6 26.4 28.6 26.9 28.6 22.1 29.9 29.9 19.9 27.0 27.9 27.6 27.5 17 Factors Affecting Borrowing Costs 18 Factors Affecting Borrowing Costs 1.83% to1.65%. from category forthe“Other” to1.51% andtheaverage from1.63% PNC for theaverage CapitalMarkets,buttheydolower for Wells Fargo orRBC 117 issues.Thetheaverages materiallyaffect variable-rateissuesdonot forthose helpingtodrivedowntheaverage category, fall inthe“Other” includedinthesefigures,23of31, ofvariable-ratetransactions majority However,thelarge forPNC. intheaverages Capital Marketsandtwo forWells Fargovariable-rate issuesincludedintheaverages andRBC basis.There onanongoing receives arethree points thattheunderwriter for variable-rateissuesduetoannualremarketingfeesofseveralbasis discountstendtobelower discussed,up-frontunderwriting As previously toahighofover6%. of 0.35% wereevengreater,rangingfromalow Variations onindividualtransactions 1.5%and4.2%. discountvariedbetween underwriter’s theaverage below, The discounthasrangedconsiderably.Asdetailedinthetable underwriter’s forms. its various andWellsWachovia Fargo, andforKinnardMillerJohnsonSteichen in CapitalMarkets,forA.G.Edwards, as aredataforDainRauscher andRBC graphandtable, arecombinedintheaccompanying and D.A.Davidson datafromKirkpatrick Specifically, applicable foranalysispurposes. Pettis aggregateddatawhere andwehave other entitiesoverthepastdecade, mergedwith underwriters firms.Severalofthetopten charter by over40 totaling $3.76 The billion. ofissuanceswereunderwritten remainingquarter bond offerings Johnson Steichen361 Kinnard).These tenfirmsunderwrote longer inbusiness(Miller no bytenfirms,oneofwhich is underwritten issuancehasbeen bond school ofallcharter three-quarters Roughly Under All PNC Baird Other Coastal Securities Piper Jaffray Herbert J.Sims Herbert Dougherty Wells Fargo Miller JohnsonSteichen Kinnard CapitalMarkets RBC D.A. Davidson Underwriter Av era w ge Cos ri ter t & P ricing # ofIssues 478 117 44 30 30 50 89 22 53 13 18 12 Vari Par Millions $5,013.8 $1,256.7 a $239.7 $239.7 $230.5 $230.5 $540.8 $540.8 $930.0 $930.0 $294.0 $199.0 $132.2 $795.5 $183.6 $211.9 bles b y Under All-In Cost 7.18% 6.88% 8.05% 6.68% 8.84% 6.01% 6.95% 6.47% 7.32% 7.52% 7.71% 7.13% w ri 6.02% 9.63% 5.61% 6.01% 3.92% 8.62% 8.62% 6.31% 4.92% 3.78% 5.74% 7.54% COI ter 4.12%, for 50 transactions executed primarily between 1998and2002. primarilybetween executed 4.12%, transactions for50 Miller JohnsonSteichen Kinnard’s at discountwasslightlylower, average 2003and2007.between wasunrated. Allbutoneofthesetransactions executed transactions school fixed-rate charter discount of4.21%for30 underwriting J.Simshadanaverage discounts.Herbert underwriter’s J.SimsandMillerJohnsonSteichenHerbert Kinnard,hadthehighest Two for asunderwriter issues, school firmsthatserved 16%ofall charter Securities PNC Coastal 3% 3% 2.36% 1.65% 3.60% 1.82% 4.21% 2.33% 3.75% 1.58% 1.51% 1.57% 2.11% 4.12% UD Jaffray Piper Baird 5% 4% NUMBER Herbert J. Sims Coupon 6.61% 6.44% 6.88% 6.40% 6.98% 5.65% 6.46% 6.84% 6.27% 6.19% 7.73% 7.15% 6% Other 24% OF IS Dougherty SUES 6.59% 6% 6.39% 5.66% 6.39% 6.83% 6.22% 6.84% 6.25% 6.19% 7.05% 7.85% Yield 7.18% BY Fargo Wells UNDER MMD+(bps) 9% Davidson RBC CapitalMarkets 204 Steichen Kinnard 230 253 291 255 185 192 193 129 273 175 174 Miller Johnson D.A. 19% WR 10% 11% Term (Years) ITE 28.3 R 30.7 30.7 29.3 26.9 26.1 25.6 29.3 29.2 28.9 29.0 27.5 REPAYMENT PERFORMANCE

Charter School Bond Default Rates

Number of Issues Par in Millions Category Defaults Total Rate Defaults Total Rate Investment Grade Rating 0 198 0.0% $0.00 $2,793.2 0.0% Non-Investment Grade Rating 1 31 3.2% $2.60 $457.6 0.6% Rated Issues 1 229 0.4% $2.60 $3,250.8 0.1%

Unrated Issues 14 251 5.6% $116.90 $1,763.0 6.6% Total1 15 478 3.1% $119.40 $5,013.8 2.4%

1 Two issues had rated and unrated series.

Default Rates & Characteristics Each defaulted charter school transaction had its own unique Fifteen, or 3.1%, of the charter school bond transactions included in this circumstances and specific reasons for the school being unable to meet report have experienced a monetary default in which bondholders did not its debt service obligations, ranging from failure to maintain or achieve receive full or timely debt service payments. In terms of the dollar amount projected enrollment (seven of the defaults), to mismanagement and/or of debt originated, the default rate for the sector is 2.4%. None of the criminal activity (four of the defaults) to poor academic performance (four defaulted bond issues had investment grade ratings at issuance, and only of the defaults). However, certain general conclusions can be drawn: one, a 2000 offering in Michigan, had a non-investment grade “Ba1” rating ■■Bond Rating: No charter school bond assigned an investment from Moody’s. The single default for rated issues represents a default rate of grade rating has defaulted, and there has been only one default on the 0.4% in terms of the number of issues and 0.1% in terms of par originated. 31 charter school bonds assigned a non-investment grade rating at The 14 defaults for unrated issues represent a default rate of 5.6% in terms issuance. of the number of issues and 6.6% in terms of par originated. ■■Type of School: All of the schools in the defaulted transactions were In the defaulted transactions, underwriters were primarily limited to selling stand-alone schools. No evidence was found that any school that is part the bonds to an “accredited investor” or a “qualified institutional buyer” of a nonprofit charter network has defaulted on its payments. due to the absence of a rating, the nature of the pledged revenue and the higher risk of default. Details of these defaulted transactions are included ■■Size of School: Average enrollment at issuance for the schools was in Appendix D, with pertinent credit characteristics summarized below. The 330, and six of the schools had enrollments of fewer than 200 students. debt service coverage ratio (DSCR) and debt burden figures are based on ■■Age of School: The average age of schools at issuance was 3.9 years, the first full year of debt service with no capitalized interest. with five of the schools three years or younger in age.

■■Quality of Credit Analysis: As with any new sector, there has been Credit Characteristics of DefaultED a learning curve in terms of understanding the key drivers of risk in the Transactions charter sector. A number of these defaulted transactions would not be Variable Average High Low underwritten under current standards or purchased by investors familiar with the fundamental elements of charter risk. Age at Issuance (Years) 3.9 6.6 (0.4) Enrollment at Issuance 330 1,025 0 DSCR 1.6 3.3 1.1 Debt Burden (% of Revenue) 18% 25% 11% Default from Opening (Years) 7.7 11.8 2.3

Default from Issuance (Years) 3.9 7.7 0.5 Repayment Performance 19 20 Repayment Performance factors for charter schools. forcharter factors addressthefundamentalrisk which donot information, and economic andcurriculum,areademographic inputs,philosophy onschool focus insteadtendedto The information. disclosure did includedfairlycursory that onperformanceandthose information for thedefaultedissueshadno documents Manyofthedisclosure enrollment targetsandretainitscharter. tomeet andassessing itsability to evaluatingdemandfortheschool by NoChildLeft Behind . Student performancemeasuresarefundamental has beensimplifiedduetotheemphasisonstudentoutcomesdictated which quality, beginwithanassessmentofacademic credit analysisnow school andinvestorsfamiliarwithcharter them.Underwriters accompany andretainstudentstheper pupil revenuethat toattract ability speakstoaschool’s Academicquality documents. current disclosure performance,astandardelementof onstudentacademic information of theseofferingsisalack deficiencythat characterizes Another indicatingadequatecoverageratios. forma projections regardlessofpro schools, dollarsformost a drainonoperatingprogram than15%. spendingmore with tenschools This large burdenissimplytoo 18%as apercentoftotalrevenueaveraged forthe15 defaultingschools, andleaseexpense Debtservice enrollment growthforearly-stageschools. 15% percentagesrangingbetween allow of and20%duringtheperiod fall withinthe12% to15% lenderswill some nonprofit range,although Ideally,this benchmark should andleaseexpenseforfacilities. service theshareofrevenuesdedicatedtodebt to evaluatecurrenttransactions, ofastandard analyticalbenchmark used documents disclosure the various in consideration aseeminglyhealthy1.6x,therewaslittleorno averaged coverageratios While debtservice were assumingwiththesetransactions. ofemphasisonthedebtburdenschools Also informativeisthelack payments. school’s to makeitsdebtservice ability liketheonesgenerallyrepresentedhere,waslikelymaterialto schools, studentforsmaller lost witheach therevenueassociated decreases, forsuch generallyhadanexplanation documents disclosure various issuance.While the trends oradropinenrollmenttheyearofbond Sevenofthe15for theseschools. enrollment eitherhaddeclining schools istheenrollmenttrend examined undercurrentcreditanalysispractices closely bemore thatwould elementofthesetransactions An important andinvestorsiscrucial. credit analysisbyunderwriters ofthis thesophistication rating inallbutoneofthedefaultedtransactions, themselves.Giventheabsenceofa andtheschools investors inthebonds credit analysisoverthe13-yearboth to ofissuancethatisbeneficial period the 15 school illustratesanimprovementincharter defaultedtransactions issuancesfor andbond oftheschools ofthecharacteristics Examination Bes t P ra c t ices in Credi t A naly sis resume infull. flows improvetothepointwhereprincipalandinterestpaymentscan strainedcash ofaturnaroundinwhich theschools’ agreements inhopes toenterintoforbearance chosen have debt isstilloutstanding,bondholders arestilloperatingand investors.Inthethreecaseswhereschools affected to netproceeds inordertoforward property saleofthemortgaged awaiting asthetrusteeis ispendingonfourtransactions payment resolution of18%a low of55%. toahighof70%, Final withaweightedaverage outstandinghasrangedfrom asapercentageofbonds to bondholders onandsold,recovery beenforeclosed thathave facilities For thesixschool duringthetermoftheircharter. revoked their charters beaddressedinatimelymanner.The had could not remainingfourschools andfinancialproblemstheyfelt academic duetoserious their charters surrendered fourvoluntarily andanother and operateundertheircharter, continuetoretain Fourschools period. ofthecharter attermination process throughtheformalizedrenewal oftheircharter tonon-renewal were subject onlythreeoftheschools term.Infact, five-year charter than thetypical 3.9yearsfromissuance,less thedefaultoccurred onaverage, transactions, thatforthe15This bythe fact changing emphasisissupported defaulted strengthandsoundfinancialmanagement. —academic schools charter solvencyfor onthefundamentaldriversoflong-term placed they have giventheaddedweight emphasisonthelengthofcharter decreasing placed have schools andinvestorsfamiliarwithcharter Lastly, underwriters enhancement builtintotheissuestructure. ofcredit because tobondholders loss payments,buttherewasno service failedtomakedebt cases,schools and assumedthedebt.Inothertwo overthefacility took school charter instance,another ineach however, wereforcedtoclose; Infourofthesecases,schools default onthebonds. monetary no payments,buttherewas difficulties makingdebtservice experienced inwhich theschools identifiedsixothertransactions have we tothe15In addition transactions, bond school defaultedcharter Reco Non- Monetary Def v ery ault s philanthropy andindividualdonations. may bebetterabletosupplementreducedpublicrevenueswithprivate alsoprovedadeptatfundraisingfromprivatesourcesand operators have overtheirpersonnelandbudgets.Manyofthehigh-performingcharter have they ofthegreaterflexibility districtsbecause school better thantraditional The isthattheymaybeabletoweathercuts schools silverliningforcharter program. on theiracademic impact aserious they canaffordtopaywithout canassumeandtheinterestrates schools ofdebtcharter theamount both of revenuegrowththanexperiencedinpastyears.These affect reductions rate perpupilfundingoramuch slower eitherlower face schools, charter including ofpublicschools, Asaresult,majority budget shortfalls. of because onfundingforpubliceducation and manyarecuttingback governments, stateandlocal hascausedgrowingstrainonmost recession themunicipalmarketataffordablerates.The recent toaccess schools inthecurrentenvironmentmakeitdifficultfor charter Several factors million. issuance willapproximate2010 levels,with70 issuestotalingroughly$900 ofissuancecontinuesthroughyear-end, Ifthecurrentpace had closed. transactions TM3, throughmid-May,27 bond school charter tax-exempt issuancewillremainflatin2011. bond school that charter Accordingto financing,itislikely facility school Despite agrowingdemandforcharter CONLUSION Challen (1 (1 $1 (5,000) 5,000) 0,000) 5,000 0,000 0 g $92 4/1 e s 0 0 Ahead $2,63 5/1 0 5 $1 6/1 MUNICIP ,909 07 $3,8 /1 10 AL 0

BOND $5,1 8/1 05 0 F Source: InvestmentCompany Institute UNDS: MONTH $2,2 9/1 ($ inMillions) 01 91 $1 0/1 spreads and high All-In Costs. Ofthe71spreads andhighAll-InCosts. issuancesthatcametomarketin wide issuancein2010, faced bond schools charter school of charter most volume credit crisis.Evenwiththesignificantincreaseinnumberand tohistorichighssincethe remainedclose have rated municipalbonds andhigher lower spreadsbetween thisreport, As discussedthroughout steepnessmeanshigherinterestratesfortheirborrowings. this near-record bonds, generallyissue30-year schools Sincecharter rates thanistypical. years,amuch largerdifferencein of30 withamaturity similarly ratedbond 0.27% atalow stood versusayieldof4.37%a one-yearmaturity fora than usual.AsofMay13, 2011, with the yieldforatriple-Aratedbond maturitiesisgreater maturitiesversusshorter withlonger rates forbonds highs,meaningthatthedifferenceininterest torecord isclose yield curve inthecurrentmarket.The steepnessofthe oftheyieldcurve is theslope schools interestratesforcharter thatisnegativelyaffecting factor Another generally. paperandhigherinterestratesformunicipalofferings seeking tax-exempt This hasresultedinfewerinvestors situation weeks ofnetwithdrawals. end ofApril2011, than20 straight fundshadseenmore municipalbond from themunicipalmarketinordertoreinvestelsewhere.Through the investorswithdrewfunds publiclydisagreed,manycautious finance expert in2011. public default ontheirmunicipalbonds every virtually Although bankruptcyand declare would governments number ofstateandlocal bankanalystpredictedthatanunprecedented Minutes,”awell-known “60 2010in municipalinterestrates.OnaDecember broadcastofCBS’ national and potentialdefaultsbystatesmunicipalities,causingageneralrise tobudgetdeficits hasbeendevoted significantmediaattention In addition, ,94 0 1 LY INF ($7 1 1/1 ,70 LOWS 01 2) ($1 &O 3,3 2/1 0 57) UTF ($1 1/1 2,398 LOWS 1 ) ($4,323)

2/1 1 ($2,665 3/1 1 ) ($6 4/1 17 1 ) 21 Conclusion -1 -1 -5 1 5 5 0000 0000 000 000 000 0 22 Conclusion facility financingwillincrease. regularandfrequent They maybecome facility theirdemandforaffordable,tax-exempt models, successful education continuetoexpandandreplicate networks Asthelargecharter correctly. canhelpensurethatofferingsareratedandpriced riskwho school charter wellversed inthefundamentalsof withunderwriters towork is forschools investmentgraderating.Equallyimportant beassignedabelow that would benefit fromobtainingarating,eventhose would schools market, most needs.Giventhewidecreditspreadsincurrent market fortheirfacilities bond thetax-exempt readytoaccess andstand-alone, network both high-performing,financiallystrongschools, There aremanyacademically performance. rely onthe13-year ofactual record track lensofitsearlyyearsandinstead withthecautious viewthesector longer no ensurethatmarketparticipants performanceshould A reviewofactual intermsofcreditanalysis. therehasbeenalearningcurve any newsector, aswith assigned aninvestmentgraderatinghasdefaulted.Furthermore, bond school Nocharter for ratedissuesfallto0.4%and0.1%,respectively. ofdebtoriginated,defaultrates issues and2.4%intermsoftheparamount was3.1%intermsofthenumber asawhole default rateforthesector arefinanced. While the facilities school charter regardinghow discussion theongoing alikeandthatitwillfurther helpful toinvestorsandborrowers We provideswillbe thattheincreasedtransparencythisreport arehopeful the municipalmarketataffordablerates. access to schools Unless spreadsnarrow,itwillremaindifficultfor charter fortriple-Bratedissuesto8.1%unratedissues. ranging from6.85% All-InCosts and332basispointshadaverage 244 between averaged that spreadstothetriple-AMMD or wereunrated.These faced schools remaining 62,or87%, investment graderatings orbelow eitherhadlow that garnered“A” ratingsduetoColorado’s pledge.The obligation moral 2010, onlyninebenefitedfromcreditenhancement,includingsevenissues P ward ath For efficient mannerpossible. areusedinthemost facilities aggregate publicoutlaysforschool toeducatingstudentsandthat ensure thatscarcepublicfundingisdirected There couldimplementto thepublicsector areawiderangeofoptions for schools. designed specifically charter from similarly structured programs establishedbytheSmallBusinessJobsActof2010guarantee program or couldalsobenefit fromthefederal schools Charter borrowers. school ofeligible charter andexpandthepool reserves loss tofundfirst programs withstate inpartnership enhancement grantfundscouldbeemployed ofzerodefaultsoveritseightyearsexistence.Federalcredit record withinvestmentgraderatingsandhasatrack- bonds school to charter hasbeenlimited to mitigaterisk.Colorado’s program obligation moral in thecaseofdefault.Creditcriteriacanbebuiltintotheseprograms offunds,except anyappropriation without schools expense forcharter toreduceinterest entity the greatercreditstrengthofgovernmental beextremelyefficient. sheet pledges,orguarantees,would They employ thatusebalance state, municipalorfederalcreditenhancementprograms of structures,expansion withtax-backed directly facilities school charter ofpubliclyfinancing Short facilities. school offinancing charter method toaddresstheinequitableandinefficient ideal timeforthepublicsector efficientlyinadifficultfiscalenvironment,itisthe public resourcesmore ofthenation’s systemandtheneedtousescarce quality publiceducation publicmandatetoimprovethe More fundamentally,withthemounting composition. onkeypersonnelandboard and information financial statements,multi-yearproformabudgets,debtburdenanalyses performancemeasures,enrollmenttrends,historicalaudited academic for financingwithappropriateandrelevantcreditmaterials,such as tostaysmallisbewell-prepared chosen thathave schools stand-alone forhigh-quality lesscompelling.Theno keytoaffordablemarketaccess islessclear,but schools forstand-alone “muni names.”The pathforward well-known andeventuallymayevenbecome municipal marketborrowers or other third-party, maybesubstitutedfortheobligor’s credit. or otherthird-party, insurer, abond rates investorswillrequire.Inthecaseofenhancedbonds, for theoffering,anditsfinancialstrengthisdeterminantinterest ratherthantheissuer,iscredit asobligor, school issuance, thecharter Insuch conduit or“obligor.” and relendingthemtotheultimateborrower fundsfrominvestors borrowing solelyasanintermediary, the issuerserves Inthecaseofconduitissuance, forfinancingpurposes. that sellssecurities basis.The issueristhelegalentity in ordertoissuedebtonatax-exempt publicorquasi-public conduitissuers generallyaccess schools Charter return. thesameafter-tax this debttoachieve interestratesfor lower investorsarewillingtoreceive to theseexemptions, issuesissubject fromtax-exempt theincomeinvestorsreceive Because taxation. issuesisalsoexemptfromstateandlocal federally tax-exempt states,interestfrom Inmost is generallyexemptfromfederaltaxation. thatsatisfyapublicpurpose public capitalimprovementsorotheractivities entitiestofinance that isissuedbystates,citiesandothergovernmental mustrepaytoinvestors.Municipaldebt theborrower istheamount a bond valueof The principal,parorface date, andtopayinterestatfixedintervals. date,thematurity with lenderstorepayprincipalonorbeforeaspecific entersintoacontract Bonds aredebtinstrumentsinwhich theborrower TA APPENDIX A Issuer T a x X- Charter Obligor - Ex EX empt Bonds EMPT

BOND FINANCING TERMINOLOG Conduit Issuer Investors Y is lower. is lower. issoldatapremium,theyield higher thanthestatedcoupon.Ifbond issoldatadiscount,theyieldtoinvestors inversely related.Ifthebond thanparsellsatapremium.Theat more are yieldandthepriceofabond thatsells thatsellsatlessthanparissoldadiscount,andbond A bond isissuedorresold,itcansellatapricethatdiffersfromitsparvalue. bond issolddiffersfrompar.Whencoupon rateifthepriceatwhich a thebond fromthe The Itcanvary yieldtoinvestorsistherateofreturnonbond. onthebonds. accrues The bonds. dateddateisthefromwhich school charter interest including payments aregenerallymadesemi-annuallyformunicipalbonds, Coupon interestpaymenttobondholders. makesaperiodic the borrower predetermined spreadtotheindex.Coupondatesareonwhich plusa FinancialMarketsAssociation), Industry (Securities such asSIFMA marketindices, designateddatesinthefuturebasedonspecific certain theinterestrateisseton term, variable-rate.Invariable-ratebonds, bond’s overa fixed-rate,oritcanvary issuance forthelifeofbond, Thebond. interestrateutilizedtocalculatethecouponcanbefixedat ofthe interest paymentsarecalculatedbasedontheprincipalamount Theduring thelifeofbond. couponrateistheinterestatwhich paystoinvestors The interestpaymenttheborrower couponistheperiodic bonds is the amortization schedule for the bond issueasawhole. schedule forthebond istheamortization bonds Theredemption). repaymentofprincipalthroughtheseserialandterm sinkingfund schedule (mandatory redemption toamandatory according beforematurity ofthetermbond redeemsorrepaysportions borrower wherebythe to makesinkingfundpaymentsoverthelifeoftermbonds, longer. Borrowersmayberequired offive yearsor generally inintervals date, aggregating severalyears’principalrepaymentintoasinglematurity years oftheissuance.Term tendtomaturelaterintheissuance, bonds generallyoverthefirstfivetoten matureserially,orchronologically, bonds Serial leveldebtservice. withinasingleofferingtoachieve term bonds paymentsfortheirdebt.Theyand serialbonds employ level debtservice generallystrivetoachieve schools, includingcharter Municipal borrowers, Yield Coupon A mort iz at ion 23 Appendix A 24 Appendix A measured inbasispoints. is ofthesamematurities.The ratedbonds andlower spreadtoMMD bonds triple-Aratedmunicipal theyielddifferentialbetween reflects triple-A MMD The spreadtothe astheMunicipalMarketDataIndex,orMMD. is known bonds forhighly ratedmunicipal canbesignificant. bonds The yieldcurve rated revenue andlower bonds highlyratedGO between costs borrowing perpupilrevenue.The schools, tolls or,inthecaseofcharter differencein fees,gastaxes, by adefinedrevenuestream,such asmunicipalutility aresecured debtstructures.Revenuebonds strongest ofalltax-supported andareconsideredthe poweroftheissuinggovernment faith andtaxing bythefull aresecured bonds GO orrevenuebonds. bonds (GO) obligation Tax-exempt arebroadlyclassifiedaseithergeneral municipalbonds (downwardsloping). inverted beenflator have structure,whenyieldcurves generally upwardsloping tothe ofexception beenperiods differentmaturities.Therebetween have year maturities,oritcanbeflatter,withfairlyconstantmarginalincreases withone-versusthree- bonds large differencesininterestratesbetween Forexample,itcanbesteepintheearlyyears,with canvary. the curve theterm,higherinterestrate.The thelonger sloping; steepnessof isupward Generally,theyieldcurve astheyieldcurve. isknown quality ofthesamecredit The yieldandmaturitiesofbonds between relationship Yield Cur Securi Yield ty v e Time private placement memorandum orofferingmemorandum. memorandum private placement asa isknown credit rating.The forprivateplacements offeringdocument includinganycreditenhancement,andthe repayment fortheborrowing, and thesourcesof thesecurity the structureandtermsofbonds, thatisbeingfinanced, theproject the borrower’s financesandoperations, theissuer, yields andmaturities.Theabout containsinformation document couponrates, bond terms,includingprincipalamounts, contains thefinal final. bondsand (OS)isprintedaftersaleofthe The finalofficialstatement isdraftedandusedforsolicitinginvestorsbeforefinancingtermsare (POS) officialstatement toinvestors.Apreliminary for marketingmunicipalbonds used andofferingdocument disclosure The officialstatementistheprimary discount. spreadorunderwriter’s aresold,calledthegross securities andthepriceatwhichthe purchase the pricethey payforthesecurities arecompensatedforthisriskbythedifferencebetween sale. Underwriters purchase and between markets andassumesfinancialriskintheperiod theissuerandcapital between asanintermediary serves underwriter resellsthemtoinvestors.The dealer,who asecurities by anunderwriter, agent.When soldviapublicoffering,newissuesarepurchased a placement withsuch investorsthrough toinvestorsor“placed” aresolddirectly bonds When soldviaaprivateplacement, market ratesviaaprivateplacement. capitalatorbelow investorswillingtoprovidelow-cost mission-driven theremaybe schools, Forcharter investors, viaaprivateplacement. capital markets,viaapublicoffering,ortosmallergroupofselect Tax-exempt canbeinitiallyissuedeitherthroughsaletothepublic bonds represents the All-In Cost fortheissue. represents theAll-InCost netofexpenses. This foritsproject received singlediscountrate borrower the proceeds bond a number,thetargetvalue,representing theactual atasinglerateto paymentstreamback by discountingthedebtservice ofissuance.Itiscalculated interestratesandcosts both takes intoaccount issuance, forabond asthe All-InCost known The cost, trueborrowing expense. tofundtheadditional seriesofbonds taxable canissuea exceed thiscap,theborrower In caseswhereissuancecosts issueamount. toacapof2%thetax-exempt subject proceeds, bond outof fundthesecosts Borrowerstypically fees forenhancedtransactions. andinsurancepremiumsup-frontletterofcredit for ratedtransactions counsel,trusteefees,issuerratingagencyfees legal feesforvarious These include transactions. bond tax-exempt expenses inordertoexecute mustpayother schools discount,charter totheunderwriting In addition Offici Sale A Cos ll-In Co ll-In t s al Statement of Issuance s t debt service paymentsinexchange foranannualletterofcreditfee. debt service hasatermofonetofiveyearsduringwhich thebankguarantees typically are generallyusedforvariable-rateissuancessincetheletterofcredit inexchange foranup-frontpremiumpayment.Lettersof thebond ofcredit provides a100% guaranteeofprincipalandinterestpaymentsfortheterm fixed-rateissuesinwhich theinsurer beenusedforlong-term typically Bondinsurancehas enhancement ratherthanthestrengthofborrower. thatisprovidingthe the insurer,bankorphilanthropicorganization of tothecreditworthiness investorslook substitutions, In third-party issue. into thebond structured reserves debtservice repayment, asinthecaseofadditional collateral pledgedfor specific pledges,oritcaninvolve obligation moral insurance,lettersofcreditand party’s credit,asinthecaseofbond ofastrongerthird thesubstitution Credit enhancementcaninvolve offerings. bond secure utilizecreditenhancementtofurther borrowers interestrates,many highercreditratingsandlower In ordertoachieve bythethreeratingagenciesareincludedinAppendixB. scales employed the riskprofilescorrespondingtodifferentgrades. long-term rating The informand theyaresimilarboth has itsownsystemofratings,although ofthethreeagencies issuances.Each andlong-term scales forshort-term withdifferent quality, ratings onscalesrangingfromhighesttolowest ofrepaymentbyprovidingcredit fixed incomeissuancesandthelikelihood of ofthecreditworthiness rating agenciesprovideindependentevaluations The andStandardbonds. school ratedcharter &Poor’s,Service each have intheU.S.market,Fitch Ratings,Moody’srating agenciesactive Investors risk forinvestorsandcorrespondinglyhigherinterestrates.The threemajor Aweakercreditrepresentshigher investors useinmakingtheirdecisions. offullandtimelyrepaymentthat which isanassessment oftheprobability acreditrating, canhirearatingagencytoassignitsbonds A borrower Credi R at ing t Enhan cement Agencies 25 Appendix A 26 Appendix B APPENDIX B APPENDIX B: LONG-TERM BOND RATING SCALES

Rating Description Fitch Ratings Moody’s Investor Services Standard & Poor’s Investment Grade Highest Quality Aaa Minimal Risk AAA AAA AA + Aa1 AA + High Quality Aa2 Very Low Risk AA AA AA - Aa3 AA - A + A1 A + Upper Medium Grade Quality A2 Low Risk A A A - A3 A - BBB + Baa1 BBB + Lower Medium Grade Quality Baa2 Some Speculative Characteristics BBB BBB BBB - Baa3 BBB - Non-Investment Grade BB + Ba1 BB + Speculative Ba2 Substantial Risk BB BB BB - Ba3 BB - B + B1 B + Highly Speculative B2 High Risk B B B - B3 B - CCC + Caa1 CCC + CCC Caa2 CCC Substantial Risks Caa3 In Poor Standing CCC - CCC - CC Ca CC C C C DDD In Default DD – D D APPENDIX C APPENDIX C: CHARTER SCHOOL BOND ISSUANCE

Dated $ Par Credit Rating Initial Coupon Exempt Spread to All-In Lead Date State School Issuer Series Millions Enhancement Agency Rating Type Maturity Coupon Yield MMD Cost COI UD Underwriter 1 9/1/1998 MI Concord Academy Concord Academy 1998 1.335 Unenhanced NR NR F 9/1/2018 7.000 7.000 230 7.96% 9.74% 5.00% Miller, Johnson & Kuehn 2 9/1/1998 MI Summit Academy Summit Academy 1998 4.110 Unenhanced NR NR F 9/1/2018 7.000 7.000 200 8.01% 8.58% 5.00% Miller, Johnson & Kuehn 3 10/1/1998 MI Concord Academy-Boyne Concord Academy-Boyne 1998 2.175 Unenhanced NR NR F 10/1/2019 7.000 7.000 Na 8.04% 9.17% 5.00% Miller, Johnson & Kuehn Liberty Common Colorado Educational and Cultural 4 11/10/1998 CO 1998 3.660 Unenhanced NR NR F 8/15/2019 6.950 6.950 204 Na Na Na Kirkpatrick Pettis School Facilities Authority St. Paul Housing and Redevelopment 5 12/29/1998 MN Community of Peace Academy 1998 3.570 Unenhanced NR NR F 11/1/2029 6.100 Na Na Na Na Na Na Authority Traverse Bay 6 2/1/1999 MI Traverse Bay Community School 1999 2.160 Unenhanced NR NR F 2/1/2025 7.000 7.000 209 7.79% 8.58% 4.50% Miller, Johnson & Kuehn Community School 7 4/1/1999 MI Countryside Charter School Countryside Charter School 1999 2.780 Unenhanced NR NR F 4/1/2029 7.000 7.000 195 7.68% 7.16% 5.00% Miller, Johnson & Kuehn West Michigan Academy West Michigan Academy 8 5/1/1999 MI 1999 3.165 Unenhanced NR NR F 5/1/2029 7.000 7.000 186 7.90% 9.39% 5.00% Miller, Johnson & Kuehn of Arts and Academics of Arts and Academics Mosaica Academy of Saginaw 9 6/1/1999 MI Mosaica Academy of Saginaw 1999 4.035 Unenhanced NR NR F 6/1/2029 7.000 7.000 170 7.31% 5.79% 4.00% Miller, Johnson & Kuehn (Saginaw Prep) 10 6/1/1999 MI Pansophia Academy Pansophia Academy 1999 2.405 Unenhanced NR NR F 6/1/2029 7.000 7.000 176 7.62% 8.28% 5.00% Miller, Johnson & Kuehn Higher Ground St. Paul Housing and Redevelopment 11 6/3/1999 MN 1999 6.400 Unenhanced NR NR F 11/1/2028 5.500 5.500 30 6.02% 5.71% 2.50% John G. Kinnard Academy Authority Acorn Dual Language Community St. Paul Housing and Redevelopment 12 6/15/1999 MN 1999 2.000 Unenhanced NR NR F 11/1/2024 6.600 6.600 140 7.44% 8.83% 3.00% John G. Kinnard Academy Authority Boston Renaissance Charter Public Massachusetts Development Finance Tucker 13 6/23/1999 MA 1999 20.275 BankBoston NR NR VR 7/1/2024 VR VR VR VR 4.06% 0.77% School Agency Anthony First National 14 6/24/1999 IL Noble Street Charter School City of Chicago 1999 2.500 NR NR VR 6/1/2024 VR VR VR VR 2.00% 1.50% Banc One Bank of Chicago Colorado Educational and Cultural 15 7/8/1999 CO Liberty Common School 1999 3.666 Unenhanced NR NR F 8/15/2019 6.950 6.950 167 Na Na Na Kirkpatrick Pettis Facilities Authority 16 8/1/1999 MI Island City Academy Island City Academy 1999 1.755 Unenhanced NR NR F 8/1/2029 7.250 7.250 167 8.02% 7.95% 5.01% Miller, Johnson & Kuehn Colorado Educational and Cultural 1999 A 17 8/5/1999 CO DCS Montessori School 7.235 Unenhanced NR NR F 7/15/2024 6.500 Na Na 7.31% 7.44% 4.17% Bigelow Facilities Authority 1999 B Colorado Educational and Cultural 18 9/29/1999 CO The Renaissance School 1999 3.690 Unenhanced S&P BBB- F 6/1/2029 6.750 6.750 108 7.10% 3.98% 1.70% Kirkpatrick Pettis Facilities Authority Colorado Educational and Cultural 19 10/1/1999 CO Jefferson Academy 1999 2.600 Unenhanced S&P BBB- F 6/1/2025 6.700 6.700 98 7.26% 5.77% 1.63% Western Municipal Securities Facilities Authority 20 10/1/1999 MI Center Academy Center Academy 1999 3.960 Unenhanced NR NR F 10/1/2029 7.500 7.500 156 8.08% 7.16% 4.00% Miller, Johnson & Kuehn Colorado Educational and Cultural 21 11/3/1999 CO Core Knowledge Charter School 1999 3.330 Unenhanced S&P BBB F 11/1/2029 7.000 7.000 106 7.36% 4.61% 1.98% Kirkpatrick Pettis Facilities Authority 1999 A 22 12/1/1999 MN Bluffview Montessori School Winona Port Authority 3.500 Unenhanced NR NR F 12/1/2024 8.000 8.000 210 8.25% 6.99% 2.50% John G. Kinnard 1999 B 27 Appendix C 28 Appendix C

APPENDIX C: CHARTER SCHOOL BOND ISSUANCE

Dated $ Par Credit Rating Initial Coupon Exempt Spread to All-In Lead Date State School Issuer Series Millions Enhancement Agency Rating Type Maturity Coupon Yield MMD Cost COI UD Underwriter Village School of 1999 A 23 12/1/1999 MN City of Northfield 1.320 Unenhanced NR NR F 12/1/2024 7.500 7.500 168 8.74% 12.43% 3.40% John G. Kinnard Northfield 1999 B St. Paul Housing and Redevelopment 2000 A 24 1/1/2000 MN New Spirit Schools 6.500 Unenhanced NR NR F 12/1/2002 9.000 9.000 445 11.00% 5.53% 2.25% John G. Kinnard Authority 2000 B Fate, TX Higher Educational Facilities 25 1/1/2000 TX North Hills Preparatory 2000 6.000 Unenhanced Moody’s Baa3 F 12/1/2025 7.750 7.750 Na Na Na Na Coastal Securities Corporation 2000 A Fitch AAA 26 2/1/20001 FL Four Corners Charter School School Board of Osceola County, FL 2000 B 17.080 National (MBIA) F 8/1/2024 6.000 6.050 12 6.17% 2.78% 0.80% Paine Webber Moody’s Aaa 2000 C 27 2/1/2000 MI Black River Public School Black River Public School 2000 5.770 Unenhanced Moody’s Baa3 F 2/1/2030 7.250 7.500 160 7.84% 5.73% 4.00% Miller, Johnson & Kuehn 28 2/1/2000 MI Grand Blanc Academy Grand Blanc Academy 2000 5.605 Unenhanced NR NR F 2/1/2030 7.750 8.000 202 8.41% 6.14% 4.00% Miller, Johnson & Kuehn Crown Pointe Academy Colorado Educational and Cultural 29 2/15/2000 CO 2000 0.965 Unenhanced NR NR F 7/15/2025 7.250 7.250 132 8.11% 7.39% 1.90% Bigelow of Westminster Facilities Authority Maricopa County IDA Pool (Westwind, Maricopa County Industrial 2000 A 30 3/1/2000 AZ Omega, Tempe Prep, Foothills, American 28.965 Unenhanced Moody’s Baa3 F 7/1/2029 6.750 7.000 128 7.60% 4.95% 2.50% Dain Rauscher Development Authority 2000 B Heritage, Arizona Montessori, Challenge) St. Paul Housing and Redevelopment 31 3/1/2000 MN Minnesota Business Academy 2000 8.275 Unenhanced NR NR F 3/1/2030 8.000 Na Na 8.85% 5.43% 2.50% John G. Kinnard Authority 32 5/1/2000 MI The Learning Center Academy The Learning Center Academy 2000 1.825 Unenhanced NR NR F 5/1/2030 7.625 8.001 205 8.84% 9.60% 4.00% Miller, Johnson & Kuehn 33 6/1/2000 MI Countryside Charter School Countryside Charter School 2000 1.920 Unenhanced NR NR F 4/1/2029 8.000 8.375 263 9.26% 7.25% 3.50% Miller, Johnson & Kuehn 34 6/1/2000 MI Nataki Talibah Schoolhouse of Detroit Nataki Talibah Schoolhouse of Detroit 2000 5.665 Unenhanced NR NR F 6/1/2030 8.250 8.500 275 9.45% 8.08% 4.50% Miller, Johnson & Kuehn 35 6/1/2000 MI Sankofa Shule Sankofa Shule 2000 2.555 Unenhanced Moody’s Ba1 F 6/1/2030 8.000 8.250 245 8.95% 7.77% 4.50% Miller, Johnson & Kuehn 2000 A 36 6/1/2000 MN El Colegio Charter School City of Minneapolis 2.515 Unenhanced NR NR F 12/1/2003 8.250 8.250 333 12.04% 8.78% 2.80% John G. Kinnard 2000 B Colorado Educational and Cultural 37 6/8/2000 CO Compass Montessori Charter School 2000 2.015 Unenhanced NR NR F 7/15/2031 7.750 7.750 195 Na Na Na Bigelow Facilities Authority 38 8/15/20001 FL Florida State University Schools City of Tallahassee 2000 A 23.330 National (MBIA) Moody’s Aaa F 8/1/2026 5.375 5.510 4 5.52% 2.36% 0.85% Salomon Smith Barney Plymouth Educational Center Charter Plymouth Educational Center Charter 39 9/1/2000 MI 2000 2.540 Unenhanced NR NR F 7/1/2020 12.500 12.500 701 13.96% 9.69% 6.00% Miller, Johnson & Kuehn School School Maricopa County Industrial Fitch A 40 9/28/20001 AZ Horizon Community Learning Center 2000 29.590 ACA Financial F 6/1/2030 6.375 6.375 76 7.52% 5.20% 1.25% Westhoff, Cone & Holmstedt Development Authority S&P A Colorado Educational and Cultural 2000 A Fitch BBB- 41 10/1/2000 CO Bromley East Charter School 12.955 Unenhanced F 9/15/2030 7.250 7.500 191 7.61% 3.04% 2.00% Kirkpatrick Pettis Facilities Authority 2000 B Moody’s Baa3 Colorado Educational and Cultural 42 11/1/2000 CO Academy Charter School 2000 7.560 Unenhanced S&P BBB F 12/15/2030 7.125 7.350 180 7.45% 2.97% 1.60% Hanifen & Imhoff Facilities Authority Colorado Educational and Cultural 43 11/1/2000 CO Jefferson Academy 2000 0.565 Unenhanced NR NR F 12/1/2002 7.000 Na Na 13.78% 10.48% 2.65% Western Municipal Securities Facilities Authority APPENDIX C: CHARTER SCHOOL BOND ISSUANCE

Dated $ Par Credit Rating Initial Coupon Exempt Spread to All-In Lead Date State School Issuer Series Millions Enhancement Agency Rating Type Maturity Coupon Yield MMD Cost COI UD Underwriter Colorado Educational and Cultural 44 11/28/2000 CO The Classical Academy 2000 19.600 Unenhanced Moody’s Baa3 F 12/1/2030 7.250 7.625 210 7.73% 2.67% 1.75% Kirkpatrick Pettis Facilities Authority 45 12/1/2000 MI Concord Academy Concord Academy 2000 3.690 Unenhanced NR NR F 12/1/2030 8.375 8.500 318 8.99% 6.18% 4.00% Miller, Johnson & Kuehn 46 12/1/2000 MI Summit Academy North Summit Academy North 2000 3.590 Unenhanced NR NR F 7/1/2030 8.375 8.500 334 9.23% 8.32% 5.00% Miller, Johnson & Kuehn Elbert County Charter School - Colorado Educational and Cultural 47 12/12/2000 CO 2000 A 1.005 Unenhanced NR NR F 6/1/2010 8.000 8.000 347 Na Na Na Kirkpatrick Pettis Legacy Academy Facilities Authority Miller Johnson Steichen 48 1/1/2001 MI Summit Academy North Summit Academy North 2001 8.955 Unenhanced Moody’s Baa3 F 7/1/2030 7.375 7.500 233 7.82% 5.55% 3.00% Kinnard Colorado Educational and Cultural 49 3/13/2001 CO Lincoln Academy Charter School 2001 2.430 Unenhanced NR NR F 3/1/2026 8.375 Na Na Na Na Na Kirkpatrick Pettis Facilities Authority 2001 A Miller Johnson Steichen 50 4/1/2001 MI Marshall Academy Marshall Academy 3.785 Unenhanced NR NR F 4/1/2031 8.750 9.000 387 10.20% 6.72% 4.34% 2001 B Kinnard Miller Johnson Steichen 51 4/1/2001 MI Michigan Early Elementary Center Michigan Early Elementary Center 2001 2.440 Unenhanced NR NR F 4/1/2031 8.125 8.375 318 9.26% 9.28% 4.50% Kinnard Pima County IDA Pool (Series A&B) (Young Scholars Academy, International Pima County Industrial Development 2001 A 52 5/1/2001 AZ 15.395 Unenhanced Moody’s Baa3 F 7/1/2031 6.750 6.850 153 7.44% 5.64% 2.25% Dain Rauscher Studies Academy, Kingman Academy Authority 2001 B Learning ) St. Paul Housing and Redevelopment 2001 A Miller Johnson Steichen 53 5/1/2001 MN Community of Peace Academy 11.045 Unenhanced Moody’s Baa3 F 12/1/2030 7.875 7.875 259 8.25% 6.15% 3.50% Authority 2001 B Kinnard Aspire Public Schools California Statewide Communities 2001 A 54 5/15/2001 CA 17.560 Unenhanced NR NR F 8/1/2031 7.250 7.250 193 7.54% 2.79% 1.07% Prager, McCarthy & Sealy (Oakland, Lodi) Development Authority 2001 B 2001 A 5/16/20012 MI Detroit Academy of Arts& Sciences Michigan Municipal Bond Authority 30.900 Unenhanced Moody’s Ba1 F 10/1/2031 8.000 8.000 275 8.38% 4.01% 2.00% J.P. Morgan 2001 B 55 5/16/20012 MI YMCA Service Learning Academy Michigan Municipal Bond Authority 2001 12.100 Unenhanced Moody’s Ba1 F 10/1/2031 7.750 7.750 250 8.25% 5.27% 2.00% J.P. Morgan

Miller Johnson Steichen 56 6/1/2001 MI Landmark Academy Landmark Academy 2001 3.465 Unenhanced NR NR F 6/1/2031 8.375 8.500 333 9.02% 6.93% 4.00% Kinnard Miller Johnson Steichen 57 6/1/2001 MI Pansophia Academy Pansophia Academy 2001 0.685 Unenhanced NR NR F 6/1/2021 7.750 8.000 290 10.06% 15.66% 4.00% Kinnard Miller Johnson Steichen 58 6/1/2001 MI Sauk Trail Academy Sauk Trail Academy 2001 2.480 Unenhanced NR NR F 6/1/2031 8.125 8.375 320 9.13% 8.08% 4.00% Kinnard Colorado Educational and Cultural 59 6/7/2001 CO Cherry Creek Academy 2001 4.155 Unenhanced Moody’s Baa2 F 4/1/2030 6.000 6.250 101 6.61% 4.42% 1.40% Kirkpatrick Pettis Facilities Authority Advanced Education Services d/b/a Pima County Industrial Development Miller Johnson Steichen 60 8/1/2001 AZ 2001 2.780 Unenhanced NR NR F 2/1/2015 7.250 7.250 280 9.24% 11.56% 4.00% Solon Senior Academy Authority Kinnard Miller Johnson Steichen 61 8/1/2001 MI Concord Academy Antrim Concord Academy Antrim 2001 2.810 Unenhanced NR NR F 8/1/2031 8.000 8.250 327 8.87% 7.10% 4.50% Kinnard Colorado Educational and Cultural 62 8/15/2001 CO Peak to Peak Charter School 2001 18.800 Unenhanced Moody’s Ba2 F 8/15/2031 7.625 8.000 305 8.22% 2.62% 1.75% Kirkpatrick Pettis Facilities Authority 29 Appendix C 30 Appendix C

APPENDIX C: CHARTER SCHOOL BOND ISSUANCE

Dated $ Par Credit Rating Initial Coupon Exempt Spread to All-In Lead Date State School Issuer Series Millions Enhancement Agency Rating Type Maturity Coupon Yield MMD Cost COI UD Underwriter Pima County Industrial Development 2001 A 63 8/17/2001 AZ Life School College Preparatory, Inc. 12.000 Unenhanced NR NR F 7/1/2031 8.125 8.251 323 8.70% 4.38% 2.50% Wedbush Morgan Authority 2001 B Massachusetts Development Finance 64 8/29/20011 MA Boston Renaissance Charter School 2001 24.700 Fleet Bank NR NR VR 6/1/2024 VR VR VR VR 0.66% 0.14% Tucker Anthony Agency Miller Johnson Steichen 65 9/1/2001 MI Summit Academy North Summit Academy North 2001 1.050 Unenhanced NR NR F 7/1/2030 8.750 8.750 Na 10.27% 13.01% 5.00% Kinnard 2001 A 66 9/1/2001 TX Southwest Preparatory School Danbury Higher Education Authority 2.255 Unenhanced NR NR F 2/15/2021 7.500 7.500 264 Na Na Na Na 2001 B Colorado Educational and Cultural 67 9/15/2001 CO University Lab School 2001 17.630 Unenhanced Moody’s Baa3 F 6/1/2031 6.250 6.300 131 6.40% 2.43% 1.60% Kirkpatrick Pettis Facilities Authority Colorado Educational and Cultural 68 10/1/2001 CO Frontier Academy 2001 15.830 Unenhanced Moody’s Ba1 F 6/1/2031 7.375 7.500 248 7.71% 2.57% 1.60% Kirkpatrick Pettis Facilities Authority Miller Johnson Steichen 69 10/1/2001 MI Discovery Elementary School Discovery Elementary School 2001 1.820 Unenhanced NR NR F 10/1/2031 8.125 8.375 339 9.43% 10.59% 5.00% Kinnard Miller Johnson Steichen 70 11/1/2001 MI Huron Academy Huron Academy 2001 1.235 Unenhanced NR NR F 11/1/2016 7.000 7.250 262 9.06% 11.74% 4.00% Kinnard California Statewide Communities 71 11/7/2001 CA Escondido Charter High School 2001 8.600 Unenhanced NR NR F 8/1/2036 7.500 7.500 248 7.97% 4.81% 2.50% Prager, McCarthy & Sealy Development Authority Philadelphia Authority for Industrial 72 11/9/2001 PA MaST Community Charter School 2001 5.525 Unenhanced NR NR VR 11/1/2021 VR VR VR VR Na Na Na Development Pima County IDA Pool (Series C&D) (Hearn, Dobson, Paramount Education Pima County Industrial Development 2001 C 73 12/1/2001 AZ Studies, Academy with Community 18.725 Unenhanced Moody’s Baa3 F 7/1/2031 6.750 6.950 171 7.46% 5.34% 2.25% RBC Dain Rauscher Authority 2001 D Partners-Arizona, Stepping Stones Academy) Colorado Educational and Cultural Moody’s Baa3 74 12/1/2001 CO Pinnacle Charter School 2001 12.355 Unenhanced F 12/1/2021 6.000 6.250 123 6.56% 3.23% 1.75% Stifel Nicolaus Facilities Authority S&P BBB Central New York Charter School for Onondaga County Industrial 2002 A Miller Johnson Steichen 75 1/1/2002 NY 6.600 Unenhanced NR NR F 1/1/2032 8.500 8.500 346 Na 8.01% 4.00% Math and Science Development Agency 2002 B Kinnard Colorado Educational and Cultural 76 1/15/2002 CO Collegiate Academy of Colorado 2002 6.780 Unenhanced Moody’s Ba1 F 12/15/2031 7.500 7.625 252 7.93% 3.84% 2.00% Stifel Nicolaus Facilities Authority Colorado Educational and Cultural 77 1/15/2002 CO Littleton Academy Charter School 2002 4.450 Unenhanced S&P BBB F 1/15/2031 6.125 6.300 113 6.61% 3.73% 1.40% Kirkpatrick Pettis Facilities Authority Fitch AAA Osceola County Industrial 2002 A 78 2/1/20021 FL Canoe Creek Charter School 9.860 National (MBIA) Moody’s Aaa F 8/1/2032 5.125 5.200 12 5.41% 4.71% 1.25% Prager, McCarthy & Sealy Development Authority 2002 B S&P AAA Miller Johnson Steichen 79 2/1/2002 MI New Beginnings Academy New Beginnings Academy 2002 2.395 Unenhanced NR NR F 2/1/2032 8.000 8.250 322 8.93% 8.30% 5.00% Kinnard West Houston Charter Alliance 2002 A Miller Johnson Steichen 80 2/1/2002 TX Danbury Higher Education Authority 2.830 Unenhanced NR NR F 2/1/2032 7.875 8.250 314 9.20% 10.21% 5.00% (Katy Creative Arts) 2002 B Kinnard APPENDIX C: CHARTER SCHOOL BOND ISSUANCE

Dated $ Par Credit Rating Initial Coupon Exempt Spread to All-In Lead Date State School Issuer Series Millions Enhancement Agency Rating Type Maturity Coupon Yield MMD Cost COI UD Underwriter 2002 A 81 2/15/20021 TX George Gervin Academy Danbury Higher Education Authority 5.145 ACA Financial S&P A F 2/15/2022 5.750 6.000 106 7.70% 15.44% 3.75% Coastal Securities 2002 B Colorado Educational and Cultural 82 3/1/2002 CO Compass Montessori Secondary School 2002 5.645 Unenhanced NR NR F 2/15/2032 8.000 8.000 295 8.32% 3.08% 1.75% Kirkpatrick Pettis Facilities Authority Colorado Educational and Cultural 2002 A Fitch BB+ 83 3/1/2002 CO Platte River Academy 6.875 Unenhanced F 3/1/2032 7.250 7.500 230 7.84% 3.69% 1.75% Kirkpatrick Pettis Facilities Authority 2002 B Moody’s Ba1 Colorado Educational and Cultural 2002 A 84 3/15/2002 CO DCS Montessori Charter School 9.795 Unenhanced S&P BBB F 7/15/2032 6.125 6.350 105 6.57% 2.49% 1.40% Kirkpatrick Pettis Facilities Authority 2002 B Miller Johnson Steichen 85 4/1/2002 MI The Learning Center Academy The Learning Center Academy 2002 0.500 Unenhanced NR NR F 5/1/2023 7.500 7.700 263 9.53% 14.11% 5.00% Kinnard Colorado Educational and Cultural 2002 A 86 5/1/2002 CO Montessori Peaks Academy 5.860 Unenhanced NR NR F 5/1/2032 8.000 8.350 319 8.79% 3.35% 1.88% Kirkpatrick Pettis Facilities Authority 2002 B 2002 A Miller Johnson Steichen 87 5/1/2002 MI Benton Harbor Charter School Benton Harbor Charter School 6.710 Unenhanced NR NR F 5/1/2032 8.000 8.25 308 8.80% 6.34% 4.00% 2002 B Kinnard Wells Fargo 88 6/1/20021 ID Nampa Classical Academy Idaho Housing & Finance Association 2002 2.485 Moody’s Aa1 F 6/1/2017 4.800 4.800 25 5.21% 6.55% 2.50% Wells Fargo Bank Chicago Charter School Foundation 2002 A 89 6/1/2002 IL (Chicago International Charter School Illinois Development Finance Authority 16.050 Unenhanced S&P BBB F 12/1/2032 6.250 6.520 137 6.80% 4.14% 1.50% Kirkpatrick Pettis 2002 B Basil) Miller Johnson Steichen 90 6/1/2002 MI Huron Academy Huron Academy 2002 1.720 Unenhanced NR NR F 11/1/2016 7.000 7.250 281 8.63% 9.21% 4.00% Kinnard 2002 A 91 6/1/2002 MN Math & Science Academy City of Woodbury 4.530 Unenhanced NR NR F 12/1/2031 7.500 7.500 240 7.96% 5.96% 3.50% Dougherty 2002 B

1,3 Philadelphia Authority for Industrial 6/15/2002 PA Community Academy of Philadelphia Development 2002 A 13.795 ACA Financial S&P A F 6/1/2032 6.000 6.120 100 7.39% 14.05% 0.75% Advest 92 6/15/20023 PA Community Academy of Philadelphia Philadelphia Authority for Industrial 2002 B 3.250 Unenhanced NR NR F 6/15/2032 8.500 8.500 338 8.71% 2.20% 0.75% Advest Development

Pima County IDA Pool (Series E&F) Pima County Industrial Development 2002 E 93 7/3/2002 AZ (Ball-Dobson, New School for Arts, 9.555 Unenhanced Moody’s Baa3 F 7/1/2031 7.250 7.375 222 7.49% 5.14% 2.19% RBC Dain Rauscher Authority 2002 F Valley Academy) Pima County Industrial Development 94 9/11/2002 AZ Happy Valley School, Inc. 2002 5.161 Unenhanced NR NR F 7/1/2027 8.500 8.500 Na Na 4.70% 1.50% RBC Dain Rauscher Authority Colorado Educational and Cultural 2002 A 95 10/1/2002 CO Belle Creek Charter School 8.630 Unenhanced NR NR F 3/15/2032 7.625 7.750 310 8.13% 3.77% 1.85% Kirkpatrick Pettis Facilities Authority 2002 B Colorado Educational and Cultural 96 11/1/2002 CO Stargate Charter School 2002 6.795 Unenhanced S&P BBB- F 5/1/2033 6.125 6.250 128 6.46% 3.46% 1.40% Kirkpatrick Pettis Facilities Authority St. Paul Housing and Redevelopment 2002 A 97 11/1/2002 MN New Spirit Schools 6.895 Unenhanced NR NR F 12/1/2031 7.500 7.500 Na 7.86% 5.67% 3.00% Dougherty Authority 2002 B 31 Appendix C 32 Appendix C

APPENDIX C: CHARTER SCHOOL BOND ISSUANCE

Dated $ Par Credit Rating Initial Coupon Exempt Spread to All-In Lead Date State School Issuer Series Millions Enhancement Agency Rating Type Maturity Coupon Yield MMD Cost COI UD Underwriter Missouri Health & Educational 2002 A Fitch A 98 11/15/20021 MO St. Louis Charter School 6.130 ACA Financial F 3/1/2023 5.100 5.250 42 7.13% 16.93% 2.75% Morgan Keegan Facilities Authority 2002 B S&P A Miller Johnson Steichen 99 12/1/2002 MI Grand Traverse Academy Grand Traverse Academy 2002 9.110 Unenhanced NR NR F 12/1/2032 7.750 8.000 304 8.54% 6.84% 5.00% Kinnard Miller Johnson Steichen 100 12/1/2002 MI Summit Academy North Summit Academy North 2002 2.300 Unenhanced NR NR F 7/1/2030 8.750 9.000 406 10.49% 13.29% 6.00% Kinnard California Statewide Communities 101 12/5/2002 CA Aspire Public Schools - Lodi 2002 A 11.945 Unenhanced NR NR F 8/1/2032 7.250 7.250 232 7.61% 3.43% 1.04% Prager, McCarthy & Sealy Development Authority 102 12/10/2002 FL Oakland Charter School Town of Oakland 2002 8.125 Unenhanced NR NR F 12/1/2032 6.950 6.950 205 Na Na Na Commerce Capital 103 12/16/2002 DC Arts & Technology Academy District of Columbia 2002 3.900 Unenhanced NR NR VR 12/1/2027 VR VR VR VR Na Na Allfirst Bank Pima County IDA Pool (Series G&H) Pima County Industrial Development 2002 G 104 12/20/2002 AZ 4.625 Unenhanced Moody’s Baa3 F 7/1/2031 6.750 6.910 200 7.68% 6.42% 2.25% RBC Dain Rauscher (Benchmark, New School for Arts) Authority 2002 H 105 2/1/2003 MI Cesar Chavez Academy Cesar Chavez Academy 2003 9.875 Unenhanced NR NR F 2/1/2033 8.000 8.000 317 8.52% 6.85% 4.00% Herbert J. Sims 106 3/1/2003 MI Star International Academy Star International Academy 2003 12.375 Unenhanced NR NR F 3/1/2033 8.000 8.000 333 8.62% 7.71% 5.00% Herbert J. Sims Pima County Industrial Development 107 5/1/2003 AZ Milestones Charter School 2003 4.680 Unenhanced NR NR F 11/1/2033 7.500 7.500 290 8.43% 10.04% 4.00% Dougherty Authority

Colorado Educational and Cultural 5/22/20032 CO Cheyenne Mountain Charter Academy 2003 C 2.215 Unenhanced S&P BBB- F 6/15/2033 6.000 6.100 160 6.42% 5.51% 1.25% A.G. Edwards Facilities Authority 108 Colorado Educational and Cultural 2003 A 5/22/20032 CO Jefferson Academy 3.310 Unenhanced S&P BBB- F 6/15/2033 6.000 6.100 160 6.38% 5.10% 1.25% A.G. Edwards Facilities Authority 2003 B

109 6/1/2003 MI Allen Academy Allen Academy 2003 9.500 Unenhanced NR NR F 6/1/2033 8.000 8.000 377 8.75% 8.12% 5.00% Herbert J. Sims 2003 A 110 6/1/2003 TX Southwest Preparatory School Danbury Higher Education Authority 1.675 Unenhanced NR NR F 2/15/2021 7.250 7.500 354 9.92% 14.23% 6.17% Coastal Securities 2003 B Pima County Industrial Development 2003 A 111 6/26/2003 AZ Paradise Education Center 12.945 Unenhanced S&P BBB- F 6/1/2033 5.875 5.875 179 6.05% 3.18% 1.35% A.G. Edwards Authority 2003 A-T Miller Johnson Steichen 112 7/1/2003 MI Concord Academy - Boyne Concord Academy - Boyne 2003 0.645 Unenhanced NR NR F 10/1/2019 8.125 8.375 406 11.40% 18.24% 5.00% Kinnard 113 7/17/2003 IL Perspectives Charter School Illinois Finance Authority 2003 5.500 Unenhanced NR NR VR 7/1/2033 VR VR VR VR Na Na Loop Capital Pima County Industrial Development 114 8/1/2003 AZ Desert Heights Charter School 2003 5.825 Unenhanced NR NR F 8/1/2033 7.500 7.500 248 8.26% 8.65% 4.00% Dougherty Authority Pima County Industrial Development 115 8/1/2003 AZ The Excalibur Charter School, Inc. 2003 4.690 Unenhanced NR NR F 8/1/2033 7.750 7.750 270 8.66% 10.42% 4.00% Dougherty Authority Phoenix Advantage Pima County Industrial Development 116 8/26/20031 AZ 2003 10.970 ACA Financial S&P A F 7/1/2033 5.500 5.621 63 6.96% 14.96% 1.43% Westhoff, Cone & Holmstedt Charter School Authority 117 9/16/2003 IL Learn Charter School Illinois Development Finance Authority 2003 5.000 Harris NA Moody’s Aa3 VR 9/1/2033 VR VR VR VR Na Na Harris Trust APPENDIX C: CHARTER SCHOOL BOND ISSUANCE

Dated $ Par Credit Rating Initial Coupon Exempt Spread to All-In Lead Date State School Issuer Series Millions Enhancement Agency Rating Type Maturity Coupon Yield MMD Cost COI UD Underwriter Fitch AAA Colorado Educational and Cultural Syncora (XL)/ 118 10/1/20031 CO Pinnacle Charter School 2003 22.305 Moody’s Aaa F 6/1/2033 5.000 5.100 25 5.11% 3.26% 1.35% Kirkpatrick Pettis Facilities Authority Moral Obligation S&P AAA Colorado Educational and Cultural Syncora (XL)/ Moody’s Aaa 119 10/1/20031 CO The Classical Academy 2003 39.595 F 12/1/2033 5.000 5.150 23 5.10% 2.71% 0.95% Kirkpatrick Pettis Facilities Authority Moral Obligation S&P AAA 120 10/1/2003 MI Bay County Public School Academy Bay County Public School Academy 2003 3.280 Unenhanced NR NR F 10/1/2033 10.250 10.500 Na 12.00% 12.07% 5.00% Herbert J. Sims Rutgers Leap Academy University 121 10/2/2003 NJ Delaware River Port Authority, PA 2003 8.500 University Moody’s Aa3 F 9/1/2028 4.750 4.900 8 4.60% 2.01% Na Wachovia Charter School Guaranty Colorado Educational and Cultural 122 10/22/2003 CO Pioneer Charter School 2003 4.990 Unenhanced NR NR F 10/15/2033 7.750 7.875 292 8.25% 3.30% 1.75% Kirkpatrick Pettis Facilities Authority 123 10/29/2003 FL Oakland Charter School Town of Oakland 2003 0.455 Unenhanced NR NR F 12/1/2015 6.950 6.950 Na Na Na Na Commerce Capital Colorado Educational and Cultural 2003 A 124 11/1/2003 CO Leadership Preparatory Academy 2.120 Unenhanced NR NR F 5/1/2027 7.875 8.000 320 8.54% 4.39% 1.65% Kirkpatrick Pettis Facilities Authority 2003 B 125 11/1/20031 DC Friendship Public Charter School District of Columbia 2003 44.880 ACA Financial S&P A F 6/1/2033 5.250 5.450 57 6.01% 8.19% 1.11% Citigroup St. Paul Housing and Redevelopment 2003 A 126 11/1/2003 MN Achieve Language Academy 6.840 Unenhanced NR NR F 12/1/2032 7.000 7.000 223 7.48% 6.66% 3.00% Dougherty Authority 2003 B Colorado Educational and Cultural 127 12/1/2003 CO Excel Academy Charter School 2003 6.830 Unenhanced NR NR F 12/1/2033 7.500 7.750 316 8.00% 3.26% 1.70% Kirkpatrick Pettis Facilities Authority 128 12/1/2003 MI Kalamazoo Advantage Academy Kalamazoo Advantage Academy 2003 5.555 Unenhanced NR NR F 12/1/2033 8.000 8.000 323 8.66% 7.70% 4.00% Herbert J. Sims Colorado Educational and Cultural 2003 A 129 12/3/2003 CO Denver Arts & Technology Academy 8.415 Unenhanced NR NR F 5/1/2034 8.000 8.000 331 8.30% 3.09% 1.75% Kirkpatrick Pettis Facilities Authority 2003 B West Michigan Academy of Michigan Public Educational Facilities 130 12/10/2003 MI 2003 2.615 Fifth Third Bank NR NR VR 12/1/2018 VR VR VR VR 5.07% 0.75% Fifth Third Securities Environmental Science Authority Colorado Educational and Cultural Syncora (XL)/ Moody’s Aaa 131 12/15/20031 CO Liberty Common School 2003 7.190 F 12/1/2033 5.125 4.780 19 4.94% 3.62% 1.00% Kirkpatrick Pettis Facilities Authority Moral Obligation S&P AAA Neighborhood House Massachusetts Development Finance 132 12/30/20031 MA 2003 A 7.100 Fleet Bank NA S&P A+ VR 1/1/2034 VR VR VR VR 2.83% 0.86% RBC Dain Rauscher Charter School Agency Phoenix Industrial Development 2004 A 133 1/1/2004 AZ Keystone Montessori Charter School 5.842 Unenhanced NR NR F 11/1/2033 7.500 7.500 301 7.78% 4.33% 2.00% Wells Fargo Authority 2004 B Challenge to Excellence Colorado Educational and Cultural Zions First 134 1/30/20041 CO 2004 6.950 Moody’s A2 VR 6/1/2034 VR VR VR VR 8.27% 1.00% Stifel Nicolaus Charter School Facilities Authority National Pima County Industrial Development 135 2/1/2004 AZ Desert Technology Schools 2004 A 3.585 Unenhanced NR NR F 2/1/2024 7.000 7.000 251 8.53% 12.42% 4.28% Dougherty Authority Pima County Industrial Development 136 2/1/2004 AZ Skyline Technical High School 2004 6.290 Unenhanced NR NR F 2/1/2034 7.500 7.500 303 8.24% 8.63% 4.00% Dougherty Authority 137 3/1/2004 MI Allen Academy Allen Academy 2004 A 3.500 Unenhanced NR NR F 6/1/2033 8.000 8.000 366 9.17% 11.85% 5.00% Herbert J. Sims 138 3/1/2004 MI Allen Academy Allen Academy 2004 B 1.915 Unenhanced NR NR F 6/1/2023 9.000 9.250 513 10.01% 5.44% 5.00% Herbert J. Sims 33 Appendix C 34 Appendix C

APPENDIX C: CHARTER SCHOOL BOND ISSUANCE

Dated $ Par Credit Rating Initial Coupon Exempt Spread to All-In Lead Date State School Issuer Series Millions Enhancement Agency Rating Type Maturity Coupon Yield MMD Cost COI UD Underwriter 2004 A 139 3/1/2004 MN Pact Charter School City of Ramsey 11.575 Unenhanced NR NR F 12/1/2033 6.750 6.750 239 6.96% 5.50% 3.00% Dougherty 2004 B Pima County Industrial Development 2004 A 140 3/4/2004 AZ Noah Webster Basic School 12.495 Unenhanced S&P BBB- F 12/15/2034 6.125 6.188 174 6.31% 3.62% 1.35% A.G. Edwards Authority 2004 A-T A.W. Brown Fellowship Heart of Texas Education Finance 2004 A 141 3/4/20041 TX 4.450 ACA Financial S&P A F 2/15/2032 5.000 5.100 66 6.41% 13.31% 2.78% William R. Hough Charter School Corporation 2004 B Pima County IDA Pool (Series I&J) Pima County Industrial Development 2004 I 142 3/9/2004 AZ (Academy of Tucson, Carden Elementary 6.735 Unenhanced Moody’s Baa3 F 7/1/2031 6.300 6.476 205 7.05% 7.11% 2.25% RBC Dain Rauscher Authority 2004 J Charter School) Colorado Educational and Cultural Syncora (XL)/ Moody’s Aaa 143 4/1/20041 CO Parker Core Knowledge Charter School 2004 4.805 F 11/1/2034 5.125 4.550 14 4.96% 4.42% 1.00% Kirkpatrick Pettis Facilities Authority Moral Obligation S&P AAA 144 4/1/2004 MI Gaudior Academy Gaudior Academy 2004 3.075 Unenhanced NR NR F 4/1/2034 7.250 7.500 263 8.40% 9.91% 5.00% Herbert J. Sims Pima County IDA Pool (Series K&L) Pima County Industrial Development 2004 K 145 4/8/2004 AZ 5.620 Unenhanced Moody’s Baa3 F 7/1/2031 6.375 6.500 177 6.92% 4.99% 2.25% RBC Dain Rauscher (Kingman Academy of Learning) Authority 2004 L Fitch AAA Colorado Educational and Cultural Syncora (XL)/ 146 4/15/20041 CO Peak to Peak Charter School 2004 23.300 Moody’s Aaa F 8/15/2034 5.250 5.000 13 5.17% 2.92% 1.00% Kirkpatrick Pettis Facilities Authority Moral Obligation S&P AAA Fitch AAA Colorado Educational and Cultural Syncora (XL)/ 147 5/1/20041 CO Academy of Charter Schools 2004 20.765 Moody’s Aaa F 5/1/2036 5.500 5.200 12 5.46% 3.23% 1.00% Kirkpatrick Pettis Facilities Authority Moral Obligation S&P AAA St. Paul Housing and Redevelopment 2004 A 148 5/1/2004 MN Hope Community Academy 6.600 Unenhanced NR NR F 12/1/2033 6.750 6.750 188 7.25% 6.43% 3.00% Dougherty Authority 2004 B Fitch AAA Colorado Educational and Cultural Syncora (XL)/ 149 5/15/20041 CO Collegiate Academy of Colorado 2004 8.195 Moody’s Aaa F 6/15/2031 5.000 5.110 18 5.28% 4.39% 1.00% Stifel Nicolaus Facilities Authority Moral Obligation S&P AAA Pima County Industrial Development 150 5/18/2004 AZ BASIS School, Inc. 2004 1.885 Unenhanced NR NR F 7/1/2034 7.375 7.375 231 8.43% 10.60% 3.00% RBC Dain Rauscher Authority Pima County Industrial Development 151 5/20/2004 AZ Heritage Elementary School 2004 5.985 Unenhanced NR NR F 7/1/2034 7.500 7.500 242 8.18% 6.48% 3.00% RBC Dain Rauscher Authority 152 6/1/2004 MI Star International Academy Star International Academy 2004 2.540 Unenhanced NR NR F 3/1/2033 7.000 7.250 221 8.33% 9.57% 4.00% Herbert J. Sims St. Paul Housing and Redevelopment 2004 A 153 6/1/2004 MN Higher Ground Academy 8.135 Unenhanced NR NR F 12/1/2033 6.875 6.875 182 7.46% 6.69% 3.75% Dougherty Authority 2004 B 154 7/1/2004 MI William C. Abney Academy William C. Abney Academy 2004 3.620 Unenhanced NR NR F 7/1/2019 6.750 7.000 276 8.32% 9.09% 5.00% Herbert J. Sims Pima County Industrial Development 155 7/8/2004 AZ Pointe Educational Services 2004 9.750 Unenhanced NR NR F 7/1/2034 7.500 7.500 261 7.93% 5.05% 3.00% RBC Dain Rauscher Authority Columbus Bank 156 7/26/2004 FL Bay Haven Charter Academy Bay County, FL 2004 11.600 S&P A+ VR 7/1/2027 VR VR VR VR 2.00% 0.90% Merchant Capital & Trust Co Fitch AAA Colorado Educational and Cultural Syncora (XL)/ 157 8/1/20041 CO University Lab School 2004 20.525 Moody’s Aaa F 6/1/2033 5.000 5.050 27 5.06% 2.55% 0.75% Kirkpatrick Pettis Facilities Authority Moral Obligation S&P AAA APPENDIX C: CHARTER SCHOOL BOND ISSUANCE

Dated $ Par Credit Rating Initial Coupon Exempt Spread to All-In Lead Date State School Issuer Series Millions Enhancement Agency Rating Type Maturity Coupon Yield MMD Cost COI UD Underwriter James Irwin Charter High School, Colorado Educational and Cultural Zions First 158 9/2/20041 CO 2004 9.700 Moody’s A2 VR 9/1/2034 VR VR VR VR 10.48% 1.25% A.G. Edwards James Irwin Charter Middle School Facilities Authority National Fitch AAA Colorado Educational and Cultural Syncora (XL)/ 159 9/15/20041 CO Aurora Academy 2004 7.275 Moody’s Aaa F 2/15/2034 5.250 4.920 22 5.22% 4.08% 1.00% Kirkpatrick Pettis Facilities Authority Moral Obligation S&P AAA Denver School of Science and Colorado Educational and Cultural 160 10/1/2004 CO 2004 1.500 Unenhanced NR NR F 12/1/2013 5.000 5.050 27 6.19% 6.50% 1.50% Kirkpatrick Pettis Technology Facilities Authority 2004 A 161 10/1/2004 TX Arlington Classics Academy Danbury Higher Education Authority 3.460 Unenhanced NR NR F 2/15/2029 7.250 7.500 293 8.17% 8.83% 4.35% Coastal Securities 2004 B Tuscon Industrial Development 2004 A 162 10/7/2004 AZ Arizona Agribusiness and Equine Center 8.710 Unenhanced S&P BBB- F 9/1/2034 6.125 6.200 157 6.56% 5.17% 1.50% A.G. Edwards Authority 2004 A-T Chester County Industrial 2004 A 163 10/15/20041 PA Collegium Charter School 16.000 ACA Financial S&P A F 4/15/2031 5.500 5.100 47 5.94% 9.63% 2.00% Dolphin & Bradbury Development Authority 2004 B Elbert County Charter School - Colorado Educational and Cultural 164 11/1/2004 CO 2004 6.015 Unenhanced NR NR F 3/1/2035 7.375 7.450 282 7.73% 3.56% 1.75% Kirkpatrick Pettis Legacy Academy Facilities Authority Fitch AAA Colorado Educational and Cultural Syncora (XL)/ 165 11/10/20041 CO Platte River Academy 2004 8.025 Moody’s Aaa F 3/1/2034 4.750 4.910 31 5.03% 4.84% 0.75% A.G. Edwards Facilities Authority Moral Obligation S&P AAA Howard Road Academy 166 11/18/2004 DC District of Columbia 2004 6.295 Bank of America Moody’s Aa1 VR 12/1/2024 VR VR VR VR Na 0.64% Banc of America Securities Public Charter School 167 12/1/2004 MI Merritt Academy Merritt Academy 2004 3.010 Unenhanced NR NR F 12/1/2024 7.250 7.250 303 8.35% 10.30% 5.00% Herbert J. Sims Texas Public Finance Authority, 2004 A 168 12/1/2004 TX School of Excellence in Education 9.070 Unenhanced S&P BB F 12/1/2034 7.000 7.100 233 7.34% 3.22% 2.00% Kirkpatrick Pettis Charter School Finance Corporation 2004 B Allegheny County Industrial 2004 A 169 12/30/2004 PA Propel Schools (Homestead) 4.250 Unenhanced NR NR F 12/15/2029 7.500 7.750 325 8.49% 4.42% 2.50% Kirkpatrick Pettis Development Authority 2004 B Pima County Industrial Development 170 1/21/2005 AZ La Paloma Academy 2005 13.180 Unenhanced NR NR F 7/1/2035 7.375 7.375 287 7.91% 5.15% 3.00% RBC Dain Rauscher Authority A.W. Brown Fellowship Orchard Higher Education Finance 2005 A 171 2/17/20051 TX 6.250 ACA Financial S&P A F 2/15/2032 5.000 5.090 61 6.21% 12.32% 3.49% RBC Dain Rauscher Charter School Corporation 2005 B Pima County Industrial Development 172 3/1/2005 AZ Milestones Charter School 2005 3.700 Unenhanced NR NR F 11/1/2033 6.750 6.750 213 7.61% 9.71% 4.00% Dougherty Authority Horizon Community Pima County Industrial Development 173 3/9/2005 AZ 2005 32.845 Unenhanced S&P BBB- F 6/1/2035 5.250 5.250 73 5.30% 1.72% 1.00% Westhoff, Cone & Holmstedt Learning Center Authority Mystic Valley Regional Massachusetts Development Finance 174 3/17/20051 MA 2005 3.310 Sovereign Bank S&P AA+ VR 6/15/2008 VR VR VR VR 7.45% 2.00% RBC Dain Rauscher Charter School Agency National (MBIA)/ Fitch AAA 175 4/19/20051 FL Four Corners Charter School School Board of Osceola County, FL 2005 12.095 School District Moody’s Aaa F 8/1/2024 4.500 4.670 28 4.63% 2.50% 0.55% Citigroup Pledge S&P AAA 2005 A 176 5/1/2005 NY New Covenant Charter School Albany Industrial Development Agency 16.605 Unenhanced NR NR F 5/1/2035 7.000 7.375 301 8.34% 8.13% 3.75% Herbert J. Sims 2005 B 35 Appendix C 36 Appendix C

APPENDIX C: CHARTER SCHOOL BOND ISSUANCE

Dated $ Par Credit Rating Initial Coupon Exempt Spread to All-In Lead Date State School Issuer Series Millions Enhancement Agency Rating Type Maturity Coupon Yield MMD Cost COI UD Underwriter Fitch AAA Colorado Educational and Cultural 2005 A Syncora (XL)/ Kirkpatrick Pettis, 177 5/15/20051 CO Woodrow Wilson Academy 6.275 Moody’s Aaa F 12/1/2034 5.250 4.460 12 4.95% 4.25% 1.00% Facilities Authority 2005 B Moral Obligation D.A. Davidson S&P AAA Fitch AAA Colorado Educational and Cultural Syncora (XL)/ Kirkpatrick Pettis, 178 6/1/20051 CO Bromley East Charter School 2005 14.370 Moody’s Aaa F 9/1/2032 5.250 4.400 13 4.77% 3.14% 1.00% Facilities Authority Moral Obligation D.A. Davidson S&P AAA 179 6/1/2005 MI Cesar Chavez Academy Cesar Chavez Academy 2005 6.115 Unenhanced NR NR F 2/1/2033 6.500 6.500 228 8.02% 8.08% 4.00% Herbert J. Sims 180 6/1/2005 MI Landmark Academy Landmark Academy 2005 2.080 Unenhanced NR NR F 6/1/2031 7.000 7.000 281 8.30% 12.57% 5.00% Herbert J. Sims Erie County Industrial Development 2005 A 181 6/1/2005 NY Charter School for Applied Technologies 21.940 Unenhanced NR NR F 6/1/2035 6.875 7.150 283 7.89% 7.56% 3.74% Herbert J. Sims Agency 2005 B Fitch AAA Colorado Educational and Cultural Syncora (XL)/ 182 6/7/20051 CO Lincoln Academy Charter School 2005 2.470 Moody’s Aaa F 3/1/2026 5.125 4.380 26 4.87% 4.71% 0.75% Wells Fargo Facilities Authority Moral Obligation S&P AAA St. Coletta Special Education 183 6/7/2005 DC District of Columbia 2005 16.600 Bank of America Moody’s Aa1 VR 5/1/2035 VR VR VR VR Na 0.39% Banc of America Public Charter School Pima County IDA Pool Pima County Industrial Development 2005 M 184 6/16/2005 AZ (Series M&N) 2.280 Unenhanced Moody’s Baa3 F 7/1/2031 5.800 5.950 173 6.75% 8.71% 2.25% RBC Dain Rauscher Authority 2005 N (Academy of Tucson) Milwaukee, WI Redevelopment 2005 A 185 6/28/2005 WI Milwaukee Academy of Science 12.260 Unenhanced S&P BB+ F 8/1/2035 5.750 5.930 158 6.30% 4.73% 2.00% A.G. Edwards Authority 2005 B St. Paul Housing and Redevelopment 2005 A 186 7/1/2005 MN Minnesota Business Academy 6.580 Unenhanced NR NR F 1/1/2035 6.750 6.750 240 7.37% 7.13% 4.00% Dougherty Authority 2005 B Leadership Learning Partners Charter Philadelphia Authority for Industrial 2005 A 187 7/21/2005 PA 10.700 Unenhanced S&P BBB- F 7/1/2036 5.375 5.442 112 5.70% 3.75% 1.35% Westhoff, Cone & Holmstedt School Development 2005 B Miller Johnson Steichen 188 8/1/2005 ID Pocatello Community Charter School Idaho Housing & Finance Association 2005 2.480 Unenhanced NR NR F 8/1/2025 6.750 6.750 254 7.17% 6.13% 2.50% Kinnard 189 8/9/2005 MI Chandler Park Academy Chandler Park Academy 2005 7.420 Unenhanced S&P BBB- F 11/1/2035 5.125 5.230 89 5.72% 6.78% 1.75% A.G. Edwards Colorado Educational and Cultural Kirkpatrick Pettis, 190 8/15/2005 CO Knowledge Quest Academy 2005 5.840 Unenhanced NR NR F 5/1/2036 6.500 6.500 221 6.78% 3.32% 1.90% Facilities Authority D.A. Davidson 191 8/16/2005 MI Detroit Community High School Detroit Community High School 2005 11.865 Unenhanced S&P BB F 11/1/2035 5.750 5.820 142 6.25% 5.20% 1.75% A.G. Edwards Fitch AAA Colorado Educational and Cultural Syncora (XL)/ Kirkpatrick Pettis, 192 8/30/20051 CO Excel Academy Charter School 2005 7.610 Moody’s Aaa F 12/1/2033 5.500 4.828 54 4.92% 3.93% 1.00% Facilities Authority Moral Obligation D.A. Davidson S&P AAA Fitch AAA Colorado Educational and Cultural 2005 A Syncora (XL)/ Kirkpatrick Pettis, 193 8/30/20051 CO Ridgeview Classical Schools 8.185 Moody’s Aaa F 8/15/2035 5.500 4.859 57 4.95% 3.81% 1.00% Facilities Authority 2005 B Moral Obligation D.A. Davidson S&P AAA Premier Charter High School, Air Pima County Industrial Development 194 9/1/2005 AZ 2005 10.895 Unenhanced NR NR F 9/1/2035 7.000 7.000 260 7.75% 8.22% 4.00% Dougherty Academy Charter High School Authority 195 9/1/2005 MI Trillium Academy Trillium Academy 2005 7.200 Unenhanced NR NR F 9/1/2035 6.300 6.300 195 6.97% 7.41% 4.50% Herbert J. Sims APPENDIX C: CHARTER SCHOOL BOND ISSUANCE

Dated $ Par Credit Rating Initial Coupon Exempt Spread to All-In Lead Date State School Issuer Series Millions Enhancement Agency Rating Type Maturity Coupon Yield MMD Cost COI UD Underwriter 196 9/20/2005 MI Summit Academy North Summit Academy North 2005 26.595 Unenhanced S&P BB+ F 11/1/2035 5.500 5.560 126 5.87% 4.93% 1.75% A.G. Edwards 197 10/1/2005 MI Charyl Stockwell Academy Charyl Stockwell Academy 2005 12.805 Unenhanced NR NR F 10/1/2035 5.900 5.900 144 6.28% 5.28% 3.75% Herbert J. Sims 198 10/1/2005 MI Marshall Academy Marshall Academy 2005 4.230 Unenhanced NR NR F 10/1/2035 6.300 6.300 182 7.22% 9.79% 4.00% Herbert J. Sims St. Paul Housing and Redevelopment 2005 A 199 10/1/2005 MN Hope Community Academy 5.750 Unenhanced NR NR F 12/1/2033 6.250 6.250 170 6.96% 7.81% 4.00% Dougherty Authority 2005 B Beasley Higher Education Finance 2005 A Moody’s 200 10/1/20051 TX North Hills Preparatory 15.945 ACA Financial A F 12/1/2034 5.125 4.750 26 5.56% 8.18% 2.45% Coastal Securities Corporation 2005 B S&P Pima County Industrial Development 201 10/20/2005 AZ Pointe Educational Services 2005 15.580 Unenhanced NR NR F 7/1/2035 6.750 6.750 220 7.17% 4.18% 2.29% RBC Dain Rauscher Authority Chester County Industrial 2005 A 202 11/1/2005 PA Renaissance Academy 9.220 Unenhanced NR NR F 10/1/2015 5.625 5.625 164 6.74% 5.98% 3.00% Herbert J. Sims Development Authority 2005 B 203 12/1/2005 MI Allen Academy Allen Academy 2005 C 2.000 Unenhanced NR NR F 6/1/2033 9.000 9.000 446 10.95% 15.50% 5.00% Herbert J. Sims Plymouth Educational Center Charter Plymouth Educational Center Charter 204 12/6/2005 MI 2005 13.850 Unenhanced S&P BBB- F 11/1/2035 5.625 5.500 96 5.89% 5.44% 1.75% A.G. Edwards School School Michigan Public Educational Facilities 2005 A 205 12/13/2005 MI Old Redford Academy 11.100 Unenhanced S&P BBB- F 12/1/2035 6.000 6.000 150 6.19% 4.10% 2.00% Nat City Authority 2005 B Kirkpatrick Pettis, 206 12/14/2005 FL G Star School of the Arts Palm Beach County, FL 2005 A 4.455 Unenhanced S&P BB F 5/15/2035 6.750 6.750 216 Na Na Na D.A. Davidson 207 12/20/2005 MI Summit Academy Summit Academy 2005 6.855 Unenhanced S&P BB+ F 11/1/2035 6.375 6.530 199 7.36% 8.94% 1.75% A.G. Edwards Academy for Technology and the 2006 A Kirkpatrick Pettis, 208 1/15/2006 NM Santa Fe County 6.735 Unenhanced NR NR F 1/15/2036 6.625 6.625 225 7.00% 4.74% 1.70% Classics 2006 B D.A. Davidson Seed Daycare (Harvest Preparatory 2006 A Miller Johnson Steichen 209 1/25/20061 MN City of Minneapolis 7.000 US Bank NR NR F 1/1/2026 6.500 6.500 Na 7.47% 8.33% 2.65% Charter School, Inc., Hmong Academy) 2006 B Kinnard 210 2/1/2006 MI Grattan Academy Grattan Academy 2006 3.800 Unenhanced NR NR F 2/1/2036 6.500 6.500 215 7.22% 7.80% 4.00% Herbert J. Sims Michigan Public Educational Facilities 211 2/14/2006 MI Michigan Technical Academy 2006 6.950 Unenhanced S&P BB F 2/1/2036 6.500 6.670 228 7.02% 4.31% 2.00% Nat City Authority Arts Academy Pima County Industrial Development 212 4/1/2006 AZ 2006 12.325 Unenhanced NR NR F 4/1/2036 6.750 6.750 227 7.27% 6.54% 4.00% Dougherty (PLC Schools) Authority Palm Bay Community Charter School 2006 A 213 4/3/2006 FL Palm Bay City 21.100 Unenhanced NR NR F 7/1/2036 7.000 7.000 251 7.72% 6.66% 2.50% Gates Capital - Patriot 2006 B Philadelphia Authority for Industrial 214 4/15/2006 PA Richard Allen Preparatory School 2006 5.790 Unenhanced S&P BB+ F 5/1/2033 6.250 6.250 174 6.79% 6.29% 1.60% Boenning & Scattergood Development Pima County Industrial Development 215 4/25/2006 AZ Southgate Academy, Inc. 2006 10.895 Unenhanced NR NR F 12/1/2036 7.000 7.125 259 7.45% 2.95% 1.25% D.A. Davidson Authority Michigan Public Educational Facilities 216 5/1/2006 MI Walden Green Montessori 2006 4.370 Unenhanced NR NR F 4/1/2036 5.625 6.050 152 6.66% 6.90% 4.00% Fifth Third Securities Authority 2006 A 217 5/1/2006 MN Lakes International Language Academy Pine City-Minnesota 8.200 Unenhanced NR NR F 5/1/2035 6.250 6.250 172 6.81% 6.80% 4.00% Dougherty 2006 B 37 Appendix C 38 Appendix C

APPENDIX C: CHARTER SCHOOL BOND ISSUANCE

Dated $ Par Credit Rating Initial Coupon Exempt Spread to All-In Lead Date State School Issuer Series Millions Enhancement Agency Rating Type Maturity Coupon Yield MMD Cost COI UD Underwriter Pima County Industrial Development 218 5/10/2006 AZ BASIS School, Inc. 2006 5.155 Unenhanced NR NR F 7/1/2036 7.000 7.000 245 7.62% 6.15% 2.81% RBC Capital Markets Authority Phoenix Industrial Development 219 5/17/2006 AZ Villa Montessori, Inc. 2006 5.430 Unenhanced NR NR F 7/1/2036 6.500 6.500 193 7.14% 6.44% 3.00% RBC Capital Markets Authority Pima County Industrial Development 220 5/23/2006 AZ Paradise Education Center 2006 5.515 Unenhanced S&P BB+ F 6/1/2036 6.000 6.091 152 6.69% 7.18% 2.00% A.G. Edwards Authority Northern Colorado Academy of Arts and Colorado Educational and Cultural 221 5/23/2006 CO 2006 A 5.965 Unenhanced NR NR F 5/1/2036 7.000 7.000 Na Na Na Na D.A. Davidson Knowledge Facilities Authority Choice Education and Development Pima County Industrial Development 222 6/1/2006 AZ 2006 28.600 Unenhanced NR NR F 6/1/2036 6.375 6.375 189 6.90% 6.17% 4.00% Dougherty Corporation Authority Orchard Higher Education Finance 2006 A 223 6/1/20061 TX NYOS Charter School 5.080 ACA Financial S&P A F 2/15/2031 5.000 5.100 67 6.57% 14.64% Na Coastal Securities Corporation 2006 B Escondido High School, 2006 A 224 6/21/2006 CA California Municipal Finance Authority 25.500 Unenhanced S&P BBB- F 6/1/2036 5.250 5.120 66 5.57% 4.17% 2.00% Ziegler Heritage Charter School 2006 A-T Colorado Educational and Cultural 225 6/23/2006 CO Banning Lewis Ranch Academy, Inc. 2006 8.000 Unenhanced NR NR F 12/15/2035 6.125 6.125 160 6.44% 3.33% 1.80% D.A. Davidson Facilities Authority Faith Family Academy City of Cameron Education 2006 A 226 7/1/20061 TX 16.640 ACA Financial S&P A F 8/15/2036 5.250 5.320 68 6.31% 11.26% 3.50% RBC Capital Markets Charter School Corporation 2006 B Massachusetts Development Finance 2006 A 227 7/12/20061 MA Academy of the Pacific Rim 11.775 ACA Financial S&P A F 6/1/2031 5.125 5.125 51 7.10% 12.54% 2.00% Dougherty Agency 2006 B Michigan Public Educational Facilities 228 7/25/2006 MI Black River Public School 2006 8.885 Unenhanced NR NR F 9/1/2030 5.800 5.720 121 6.00% 3.50% 1.75% Fifth Third Securities Authority Kansas City Industrial Development 229 8/1/2006 MO Allen Village School 2006 4.365 Unenhanced NR NR F 8/1/2036 6.250 6.250 197 Na Na Na Na Authority A.W. Brown Fellowship 2006 A 230 8/1/20061 TX Danbury Higher Education Authority 5.140 ACA Financial S&P A F 8/15/2036 5.125 5.150 65 6.29% 13.73% 2.49% RBC Capital Markets Charter School 2006 B Texas Public Finance Authority, 2006 A 231 8/1/20061 TX KIPP Inc. 35.415 ACA Financial S&P A F 2/15/2036 5.000 4.900 57 5.31% 5.73% 0.74% RBC Capital Markets Charter School Finance Corporation 2006 B Pima County Industrial Development 232 8/29/2006 AZ Franklin Phonetic Primary School, Inc. 2006 3.900 Unenhanced NR NR F 7/1/2036 5.750 5.750 145 6.48% 7.59% 2.00% Baird Authority

2006 C 8/30/20061,2 IL Noble Network of Charter Schools Illinois Finance Authority 11.525 ACA Financial S&P A F 9/1/2031 5.000 4.820 56 5.94% 11.31% 1.84% RBC Capital Markets 2006 D 233 8/30/20061,2 IL UNO Charter School Network, Inc. Illinois Finance Authority 2006 E 7.220 ACA Financial S&P A F 9/1/2031 5.000 4.820 56 6.23% 12.73% 2.07% RBC Capital Markets 2006 F

234 9/1/2006 MI Merritt Academy Merritt Academy 2006 5.315 Unenhanced NR NR F 12/1/2036 6.250 6.250 212 6.88% 7.94% 4.00% Herbert J. Sims St. Paul Housing and Redevelopment 2006 A 235 9/1/2006 MN Hmong Academy 8.975 Unenhanced NR NR F 9/1/2036 6.000 5.900 177 6.53% 7.36% 4.00% Dougherty Authority 2006 B APPENDIX C: CHARTER SCHOOL BOND ISSUANCE

Dated $ Par Credit Rating Initial Coupon Exempt Spread to All-In Lead Date State School Issuer Series Millions Enhancement Agency Rating Type Maturity Coupon Yield MMD Cost COI UD Underwriter Seashore Center School 2006 A 236 9/1/2006 TX Danbury Higher Education Authority 3.640 Unenhanced NR NR F 2/15/2036 6.250 6.250 197 7.24% 10.18% 5.10% Coastal Securities (Island Foundation) 2006 B Pima County Industrial Development 237 9/6/2006 AZ Carpe Diem Collegiate High School 2006 3.640 Unenhanced NR NR F 8/1/2036 7.100 7.100 284 8.12% 9.75% 3.00% D.A. Davidson Authority Colorado Educational and Cultural 2006 A 238 9/12/2006 CO Academy Charter School 7.985 Moral Obligation S&P A F 12/15/2036 4.750 4.861 60 5.11% 4.36% 1.50% A.G. Edwards Facilities Authority 2006 B Cheyenne Mountain Colorado Educational and Cultural 2006 A CIFG NA/ 239 9/27/20061 CO 11.670 S&P AAA F 6/15/2036 4.500 4.585 34 4.87% 4.86% 1.10% A.G. Edwards Charter Academy Facilities Authority 2006 B Moral Obligation Florida Development Finance 2006 A 240 9/28/2006 FL Palm Bay Academy Charter School 5.920 Unenhanced S&P BB- F 5/15/2036 6.000 6.000 183 7.02% 9.30% 2.50% D.A. Davidson Corporation 2006 B Colorado Educational and Cultural CIFG NA/ Moody’s Aaa 241 10/4/20061 CO Frontier Academy 2006 17.750 F 6/1/2031 4.500 4.650 49 4.76% 2.95% 0.75% Wells Fargo Facilities Authority Moral Obligation S&P AAA Burnham Wood Charter School, Texas Public Finance Authority 2006 A 242 10/4/2006 TX 8.525 Unenhanced NR NR F 9/1/2036 6.250 6.250 212 6.53% 3.75% 2.00% Wells Fargo Da Vinci School for Science and Arts Charter School Finance Corporation 2006 B 243 10/31/2006 DE Newark Charter School, Inc. New Castle County, DE 2006 14.905 Unenhanced S&P BBB- F 9/1/2036 5.000 4.950 68 5.25% 4.17% 1.75% A.G. Edwards 244 11/1/2006 MI Dr. Charles Drew Academy Dr. Charles Drew Academy 2006 6.190 Unenhanced NR NR F 11/1/2036 5.700 5.700 168 6.39% 7.91% 4.00% Herbert J. Sims La Vernia Higher Education Finance 2006 A 245 11/1/20061 TX Southwest Winners Foundation, Inc. 9.470 ACA Financial S&P A F 2/15/2031 5.000 4.720 50 6.10% 12.79% 3.49% Coastal Securities Corporation 2006 B 246 11/8/2006 UT American Leadership Academy, Inc. Spanish Fork City 2006 25.170 Unenhanced NR NR F 11/15/2036 5.700 5.700 157 5.88% 2.76% 1.90% D.A. Davidson Pima County Industrial Development Miller Johnson Steichen 247 11/21/2006 AZ Success School, Superior School 2006 7.215 Unenhanced NR NR F 11/1/2036 6.750 6.750 272 6.90% 5.26% 2.00% Authority Kinnard Colorado Educational and Cultural CIFG NA/ Moody’s Aaa 248 11/28/20061 CO Stargate Charter School 2006 9.805 F 11/1/2038 4.500 4.590 52 4.79% 3.87% 1.00% D.A. Davidson Facilities Authority Moral Obligation S&P AAA St. Paul Housing and Redevelopment 249 11/28/2006 MN Community of Peace Academy 2006 17.245 Unenhanced S&P BBB- F 12/1/2036 5.000 4.780 76 5.27% 4.99% 3.25% Dougherty Authority Phoenix Industrial Development 2006 A 250 11/29/2006 AZ Espiritu Schools 7.855 Unenhanced NR NR F 7/1/2036 6.250 6.000 199 7.25% 9.92% 3.00% RBC Capital Markets Authority 2006 B Pima County Industrial Development 251 12/1/2006 AZ ACCLAIM Charter School 2006 7.680 Unenhanced NR NR F 12/1/2036 5.800 5.800 178 6.45% 7.71% 4.00% Dougherty Authority 252 12/1/2006 MI Crescent Academy Crescent Academy 2006 7.090 Unenhanced NR NR F 12/1/2036 5.750 5.750 173 6.46% 8.04% 4.00% Herbert J. Sims Heart of Texas Education Finance 2006 A 253 12/1/2006 TX Gateway Charter Academy 10.385 Unenhanced NR NR F 2/15/2036 6.000 6.050 198 Na Na Na Coastal Securities Corporation 2006 B Colorado Educational and Cultural 2006 A 254 12/7/2006 CO Montessori Peaks Academy 7.575 Unenhanced NR NR F 5/1/2036 5.500 5.500 154 5.71% 2.62% 1.25% D.A. Davidson Facilities Authority 2006 B Colorado Educational and Cultural 255 12/11/2006 CO Brighton Charter School 2006 10.195 Unenhanced NR NR F 11/1/2036 6.000 6.000 210 6.23% 2.53% 1.45% D.A. Davidson Facilities Authority Pima County Industrial Development 2006 A 256 12/13/2006 AZ Sonoran Science Academy of Tuscon 10.605 Unenhanced NR NR F 12/1/2037 5.750 5.750 182 6.00% 3.30% 1.75% Wells Fargo Authority 2006 B 39 Appendix C 40 Appendix C

APPENDIX C: CHARTER SCHOOL BOND ISSUANCE

Dated $ Par Credit Rating Initial Coupon Exempt Spread to All-In Lead Date State School Issuer Series Millions Enhancement Agency Rating Type Maturity Coupon Yield MMD Cost COI UD Underwriter Franklin Towne Charter Philadelphia Authority for Industrial 2006 A Municipal Capital Markets 257 12/14/2006 PA 11.525 Unenhanced S&P BBB F 1/1/2032 5.375 4.800 93 5.46% 5.65% 3.00% High School Development 2006 B Group Colorado Educational and Cultural CIFG NA/ 258 12/19/20061 CO Littleton Academy Charter School 2006 5.235 S&P AAA F 1/15/2036 4.375 4.520 57 4.80% 4.83% 0.90% Stifel Nicolaus Facilities Authority Moral Obligation Colorado Educational and Cultural 259 12/20/2006 CO Carbon Valley Academy 2006 5.305 Unenhanced NR NR F 12/1/2036 5.625 5.625 161 5.90% 2.96% 1.45% D.A. Davidson Facilities Authority Colorado Educational and Cultural 260 12/20/2006 CO Compass Montessori Secondary School 2006 6.380 Unenhanced NR NR F 2/15/2036 5.625 5.625 161 5.90% 3.36% 1.65% D.A. Davidson Facilities Authority KeyBank 261 12/21/2006 UT Monticello Academy West Valley City, Utah 2006 A 6.500 S&P A VR 6/1/2036 VR VR VR VR 8.45% 0.71% KeyBanc National 262 12/21/2006 UT Monticello Academy West Valley City 2006 B 4.500 Unenhanced NR NR F 6/1/2036 6.500 6.500 247 Na Na Na KeyBanc Friendship Public 263 12/28/20061 DC District of Columbia 2006 15.000 ACA Financial S&P A F 6/1/2035 5.000 4.470 47 5.07% 4.91% 1.10% Citigroup Charter School, Inc. Derrick Thomas Academy Charter Kansas City Industrial Development 2007 A 264 1/1/2007 MO 10.615 Unenhanced NR NR F 1/1/2037 5.875 5.875 183 6.53% 6.65% 3.50% Herbert J. Sims School, Inc. Authority 2007 B Pima County IDA Pool (Series O&P) Pima County Industrial Development 2007 O 265 1/18/2007 AZ 14.995 Unenhanced Moody’s Baa3 F 7/1/2031 5.250 4.880 86 5.38% 3.88% 2.25% RBC Capital Markets (Kingman Academy of Learning) Authority 2007 P Cambridge Lakes Learning Center 266 1/23/2007 IL Pingree Grove Village 2006 10.565 Unenhanced NR NR F 6/1/2036 6.000 6.000 186 6.27% 2.90% 1.50% William Blair (Cambridge Lakes Charter School) 267 1/24/2007 MI Connor Creek Academy East Conner Creek Academy East 2007 16.215 Unenhanced S&P BB+ F 11/1/2036 5.250 5.170 106 5.50% 3.77% 2.00% A.G. Edwards National (MBIA)/ Treasure Coast University 268 1/31/20071 FL St. Lucie County School Board 2007 21.865 School District Moody’s Aaa F 8/15/2032 4.500 4.610 45 4.68% 2.42% 0.67% Prager Sealy Charter School Pledge Chicago Charter School Foundation 2007 A 269 2/8/2007 IL (Chicago International Charter School Illinois Finance Authority 49.475 Unenhanced S&P BBB F 12/1/2026 5.000 4.740 69 5.00% 2.09% 1.15% D.A. Davidson 2007 B Northtown Academy) St Louis Industrial Development 2007 A 270 2/14/2007 MO Confluence Academy 23.705 Unenhanced NR NR F 6/15/2032 5.350 5.350 127 5.63% 3.87% 2.25% Stifel Nicolaus Authority 2007 B Pima County Industrial Development 271 2/26/2007 AZ BASIS School, Inc. 2007 9.000 Unenhanced NR NR F 7/1/2037 6.750 6.750 273 7.17% 4.33% 2.50% RBC Capital Markets Authority Idaho Housing and Finance 272 3/8/2007 ID Hidden Springs Charter School, Inc. 2007 5.805 Bank of America Moody’s Aa1 VR 3/1/2037 VR VR VR VR Na 0.80% Banc of America Association 273 3/13/2007 MI Byron Center Charter School Byron Center Charter School 2007 3.145 Unenhanced NR NR F 3/1/2037 5.600 5.397 144 6.14% 9.01% 5.00% Lake Forest Securities 274 3/13/2007 MI Grand Traverse Academy Grand Traverse Academy 2007 16.200 Unenhanced S&P BBB- F 11/1/2036 5.000 4.810 73 5.20% 4.79% 2.00% A.G. Edwards Pima County Industrial Development 275 3/21/2007 AZ Tucson Country Day School 2007 6.220 Unenhanced S&P BBB- F 6/1/2037 5.000 4.920 96 5.50% 6.57% 2.75% A.G. Edwards Authority Colorado Educational and Cultural 276 3/28/2007 CO Union Colony Charter School 2007 4.815 Unenhanced NR NR F 12/1/2037 5.750 5.400 136 5.81% 3.53% 1.65% D.A. Davidson Facilities Authority APPENDIX C: CHARTER SCHOOL BOND ISSUANCE

Dated $ Par Credit Rating Initial Coupon Exempt Spread to All-In Lead Date State School Issuer Series Millions Enhancement Agency Rating Type Maturity Coupon Yield MMD Cost COI UD Underwriter City of Albany Industrial Development 2007 A 277 3/30/2007 NY Brighter Choice Charter Schools 18.490 Unenhanced Fitch BBB- F 4/1/2037 5.000 4.840 78 5.19% 3.78% 1.44% First Albany Agency 2007 B Lee Charter Foundation Lee County Industrial Development 2007 A 278 4/3/2007 FL 82.165 Unenhanced S&P BB F 6/15/2037 5.375 5.240 120 5.57% 3.48% 1.15% Wachovia (Gateway Charter School) Authority 2007 B 279 4/12/2007 UT Freedom Academy Foundation Provo City 2007 10.750 Unenhanced NR NR F 6/15/2037 5.500 5.500 141 5.92% 4.62% 2.00% Baird Bucks County Industrial Development 2007 A 280 4/17/2007 PA School Lane Charter School 11.300 Unenhanced S&P BBB F 3/15/2037 5.000 5.000 86 5.29% 3.97% 1.75% PNC Authority 2007 B Colorado Educational and Cultural 2007 A 281 4/18/2007 CO Challenges, Choices and Images 18.430 Unenhanced NR NR F 5/1/2037 6.250 6.250 207 6.52% 2.86% 1.75% D.A. Davidson Facilities Authority 2007 B Colorado Educational and Cultural 2007 A CIFG NA/ 282 4/24/20071 CO Cesar Chavez Academy 15.570 S&P AAA F 8/1/2037 4.500 4.630 53 4.84% 3.62% 1.08% D.A. Davidson Facilities Authority 2007 B Moral Obligation 2007 A Academy of Learning and Leadership, Milwaukee City Redevelopment 283 4/24/2007 WI 2007 B 8.650 Unenhanced NR NR F 8/1/2037 5.650 5.650 146 Na 8.70% 2.20% A.G. Edwards Inc. Authority 2007 C Harmony Schools (Houston, Dallas, Texas Public Finance Authority, 2007 A 284 5/1/2007 TX 29.995 Unenhanced S&P BB+ F 2/15/2037 5.375 5.443 134 5.92% 5.47% 3.97% Coastal Securities College Station, San Antonio) Charter School Finance Corporation 2007 B IDEA Public Schools (Donna, Quest, Texas Public Finance Authority, 2007 A 285 5/1/20071 TX Frontier, Rio Grande Middle, Rio Grande 37.095 ACA Financial S&P A F 8/15/2037 5.000 4.700 57 5.07% 4.37% 0.80% A.G. Edwards Charter School Finance Corporation 2007 B Upper) 2007 A 286 5/3/2007 UT East Hollywood High School, Inc. West Valley City 6.225 Unenhanced NR NR F 6/15/2037 5.625 5.625 153 6.30% 6.98% 2.00% Baird 2007 B 287 5/3/2007 UT Monticello Academy West Valley City 2007 11.000 Unenhanced NR NR F 6/1/2037 6.375 5.930 182 6.36% 2.42% 1.06% KeyBanc 2007 A 288 5/16/2007 UT The Walden School of Liberal Arts Utah County 3.975 Unenhanced NR NR F 1/15/2037 6.250 6.250 215 6.95% 6.89% 1.90% D.A. Davidson 2007 B California Statewide Communities 2007 A 289 5/23/2007 CA Aspire and Huntington Park Alliance 15.750 Unenhanced NR NR F 7/1/2042 5.250 5.250 115 5.68% 5.38% 3.00% RBC Capital Markets Development Authority 2007 B Community Academy 290 5/24/2007 DC District of Columbia 2007 25.000 ACA Financial S&P A F 5/1/2037 4.875 4.875 Na Na Na Na Cornerstone Capital Public Charter School Hillsborough County Industrial 2007 A 291 5/25/2007 FL Terrace Community Middle School 6.215 Unenhanced S&P BBB- F 5/15/2037 5.125 5.570 134 5.77% 6.35% 1.50% D.A. Davidson Development Authority 2007 B 2007 A 292 5/30/2007 UT Lakeview Academy Utah County 9.605 Unenhanced NR NR F 7/15/2037 5.625 5.570 134 6.06% 5.18% 1.75% Piper Jaffray 2007 B 2007 A 293 5/30/2007 UT Renaissance Academy Utah County 9.645 Unenhanced NR NR F 7/15/2037 5.625 5.570 134 6.02% 4.87% 1.75% Piper Jaffray 2007 B Pima County Industrial Development 294 5/31/2007 AZ Heritage Elementary School 2007 17.000 Unenhanced NR NR F 7/1/2037 5.850 5.850 162 6.24% 4.26% 3.00% RBC Capital Markets Authority 2007 A 295 5/31/20071 IL Golder College Prep Illinois Finance Authority 13.885 ACA Financial S&P A F 9/1/2032 5.000 4.810 60 5.85% 10.48% 1.77% RBC Capital Markets 2007 B 41 Appendix C 42 Appendix C

APPENDIX C: CHARTER SCHOOL BOND ISSUANCE

Dated $ Par Credit Rating Initial Coupon Exempt Spread to All-In Lead Date State School Issuer Series Millions Enhancement Agency Rating Type Maturity Coupon Yield MMD Cost COI UD Underwriter Michigan Public Educational Facities 296 6/1/2007 MI David Ellis Academy - West 2007 14.370 Unenhanced NR NR F 6/1/2037 5.875 5.950 163 Na Na Na Na Authority Michigan Public Educational Facilities 297 6/12/2007 MI Richfield Public School Academy 2007 6.435 Unenhanced S&P BBB- F 9/1/2036 5.000 5.125 88 5.62% 5.54% 1.75% A.G. Edwards Authority Colorado Educational and Cultural 2007 A CIFG NA/ 298 6/14/20071 CO Belle Creek Charter School 9.300 S&P AAA F 3/15/2037 4.625 4.750 44 5.04% 4.57% 1.00% A.G. Edwards Facilities Authority 2007 B Moral Obligation 299 6/19/2007 MI Crossroads Charter Academy Crossroads Charter Academy 2007 5.590 Unenhanced S&P BBB- F 6/1/2035 5.250 5.490 98 5.99% 6.14% 3.35% Lake Forest Securities 300 6/21/2007 MI Concord Academy - Boyne Concord Academy - Boyne 2007 2.800 Unenhanced NR NR F 11/1/2036 5.600 5.600 129 Na Na Na Na 301 6/26/2007 DC DC Preparatory Academy DIstrict of Columbia 2007 9.580 Unenhanced NR NR VR 11/1/2033 VR VR VR VR Na Na Na 2007 A 302 7/1/2007 MI Landmark Academy Landmark Academy 1.960 Unenhanced NR NR F 6/1/2012 6.000 6.000 142 9.39% 11.91% 4.00% Herbert J. Sims 2007 B Colorado Educational and Cultural CIFG NA/ 303 7/2/20071 CO James Irwin Educational Foundation 2007 20.900 S&P AAA F 8/1/2037 5.000 4.800 33 5.15% 4.29% 1.00% A.G. Edwards Facilities Authority Moral Obligation Colorado Educational and Cultural 2007 A 304 7/5/2007 CO Windsor Charter Academy 6.905 Unenhanced S&P BB+ F 5/1/2037 5.700 5.700 121 5.97% 2.91% 1.60% D.A. Davidson Facilities Authority 2007 B Pima County Industrial Development 305 7/12/2007 AZ Center for Academic Success 2007 9.000 Unenhanced S&P BBB- F 7/1/2037 5.500 5.250 335 5.85% 4.19% 2.25% RBC Capital Markets Authority 2007 A 306 7/17/2007 UT Lincoln Academy Utah County 10.035 Unenhanced NR NR F 6/15/2037 5.875 5.875 139 6.29% 4.52% 2.00% Baird 2007 B Officer Donald J. Marquez 2007 C 307 7/18/20071 IL Illinois Finance Authority 16.000 ACA Financial S&P A F 9/1/2032 5.375 5.000 58 6.12% 10.65% 1.73% RBC Capital Markets Charter School 2007 D North Carolina Capital Facilities 308 7/18/20071 NC Magellan Charter School 2007 5.000 Wachovia Bank S&P AA VR 6/1/2027 VR VR VR VR 2.00% 1.00% Wachovia Finance Agency Philadelphia Authority for Industrial 2007 A 309 7/18/2007 PA Russell Byers Charter School 7.810 Unenhanced S&P BBB- F 5/1/2037 5.250 5.290 85 5.66% 4.51% 1.79% PNC Development 2007 B Colorado Educational and Cultural 310 7/31/2007 CO James Madison Charter Academy 2007 2.040 Unenhanced NR NR F 5/1/2037 7.500 Na Na Na Na Na D.A. Davidson Facilities Authority Colorado Educational and Cultural 2007 A 311 7/31/2007 CO Northeast Academy Charter School 5.210 Unenhanced NR NR F 5/15/2037 5.750 5.750 134 6.04% 3.02% 1.50% D.A. Davidson Facilities Authority 2007 B 312 8/1/2007 MI Star International Academy Star International Academy 2007 5.850 Unenhanced S&P BB+ F 3/1/2037 6.125 6.125 170 6.75% 6.73% 3.75% Herbert J. Sims Texas Public Finance Authority, 2007 A Moody’s Baa3 313 8/1/2007 TX Peak Preparatory 10.380 Unenhanced F 12/1/2036 5.875 5.940 121 6.30% 5.19% 1.15% A.G. Edwards Charter School Finance Corporation 2007 B S&P BBB- Challenge to Excellence Colorado Educational and Cultural CIFG NA/ Moody’s Aaa 314 8/23/20071 CO 2007 7.545 F 6/1/2037 5.000 4.900 39 5.25% 4.58% 1.25% Stifel Nicolaus Charter School Facilities Authority Moral Obligation S&P AAA North Carolina Capital Facilities 315 8/23/20071 NC Union Academy 2007 6.175 Wachovia Bank S&P AA VR 12/1/2029 VR VR VR VR 4.25% 1.25% Ziegler Finance Agency Florida Development Finance 2007 A 316 8/30/2007 FL Learning Gate Community School 7.475 Unenhanced S&P BBB- F 2/15/2037 6.000 6.050 133 6.84% 6.25% 1.50% D.A. Davidson Corporation 2007 B APPENDIX C: CHARTER SCHOOL BOND ISSUANCE

Dated $ Par Credit Rating Initial Coupon Exempt Spread to All-In Lead Date State School Issuer Series Millions Enhancement Agency Rating Type Maturity Coupon Yield MMD Cost COI UD Underwriter First Philadelphia Charter School For Philadelphia Authority for Industrial 2007 A 317 9/5/2007 PA 17.000 Unenhanced S&P BBB- F 8/15/2037 5.850 5.930 121 6.11% 2.82% 1.50% PNC Literacy Development 2007 B Rhode Island Health and Education 318 9/20/20071 RI CVS Highlander Charter School 2007 7.000 Citizens Bank S&P AA- VR 9/1/2037 VR VR VR VR 2.71% 0.40% Banc of America Building Corporation Florida Development Finance 2007 A 319 9/27/2007 FL Palm Bay Academy Charter School 6.260 Unenhanced S&P BB- F 5/15/2037 6.125 6.125 173 6.86% 5.97% 1.50% D.A. Davidson Corporation 2007 B Michigan Public Educational Facilities 320 9/27/2007 MI Bradford Academy 2007 17.300 Unenhanced NR NR F 9/1/2037 6.500 6.500 198 Na Na Na Herbert J. Sims Authority Philadelphia Authority for Industrial 2007 A 321 9/27/2007 PA Independence Charter School 18.000 Unenhanced S&P BBB- F 9/15/2037 5.500 5.500 106 5.67% 3.08% 1.67% PNC Development 2007 B Colorado Educational and Cultural 2007 A 322 9/28/2007 CO Monument Academy Charter School 12.270 Unenhanced S&P BB F 10/1/2037 6.000 6.000 154 6.17% 2.57% 1.50% D.A. Davidson Facilities Authority 2007 B Erie County Industrial Development 323 10/1/2007 NY Global Concepts Charter School 2007 8.275 Unenhanced NR NR F 10/1/2037 6.250 6.250 196 6.87% 6.72% 2.50% Herbert J. Sims Agency 324 10/2/2007 MI International Academy of Flint International Academy of Flint 2007 17.175 Unenhanced S&P BBB- F 10/1/2037 5.750 5.750 129 5.94% 3.33% 1.76% Fifth Third Securities Benson AZ Industrial Development 325 10/4/2007 AZ 21st Century (Bennet Academy) 2007 3.550 ACA Financial S&P A F 10/1/2032 6.000 Na Na Na Na Na Cohen Authority Pima County Industrial Development 326 10/10/2007 AZ The Edge School 2007 4.630 Unenhanced NR NR F 7/1/2037 6.500 6.500 213 7.26% 7.49% 3.00% RBC Capital Markets Authority American Charter Schools Foundation Pima County Industrial Development 327 10/25/2007 AZ 2007 A 82.185 Unenhanced Fitch BBB F 7/1/2038 5.625 Na Na 5.98% 3.03% 1.25% RBC Capital Markets (Alta Vista High School) Authority 328 10/30/2007 NJ Teaneck Community Charter School Bergen County Improvement Authority 2007 9.900 Unenhanced NR NR F 9/1/2037 6.750 6.750 243 7.15% 4.04% 2.35% Gates Capital 2007 A 329 10/30/2007 UT Ronald Wilson Reagan Academy Utah County 11.065 Unenhanced NR NR F 2/15/2038 6.000 6.000 173 6.27% 3.26% 1.90% D.A. Davidson 2007 B 330 11/1/2007 MI Trillium Academy Trillium Academy 2007 5.065 Unenhanced NR NR F 9/1/2035 6.500 6.500 213 7.23% 7.42% 3.50% Herbert J. Sims 2007 A 331 11/1/2007 MN Kaleidoscope Charter School City of Falcon Heights 8.610 Unenhanced NR NR F 11/1/2037 6.000 6.050 177 6.68% 6.95% 4.00% Dougherty 2007 B Utah State Charter School Finance 2007 A 332 11/1/2007 UT Channing Hall 9.590 Unenhanced NR NR F 7/15/2037 6.000 5.900 161 6.39% 5.10% 1.75% Piper Jaffray Authority 2007 B 2007 A 333 11/15/2007 MN Bluffview Montessori School Winona Port Authority 5.055 Unenhanced NR NR F 11/1/2037 6.150 6.150 175 6.77% 6.78% 3.25% Dougherty 2007 B Michigan Public Educational Facilities 334 11/20/2007 MI Nataki Talibah Schoolhouse of Detroit 2007 6.415 Unenhanced NR NR F 10/1/2030 6.500 6.500 206 7.01% 5.29% 2.80% Fifth Third Securities Authority Utah State Charter School Finance 335 11/28/2007 UT Fast Forward High School 2007 3.127 Unenhanced NR NR F 11/15/2037 6.500 6.500 Na Na Na Na Na Authority 2007 A 336 12/12/2007 OR Trillium Charter School Oregon Facilities Authority 3.395 Unenhanced NR NR F 11/1/2037 7.000 7.000 265 7.59% 6.01% 2.50% Wells Fargo 2007 One 43 Appendix C 44 Appendix C

APPENDIX C: CHARTER SCHOOL BOND ISSUANCE

Dated $ Par Credit Rating Initial Coupon Exempt Spread to All-In Lead Date State School Issuer Series Millions Enhancement Agency Rating Type Maturity Coupon Yield MMD Cost COI UD Underwriter Utah State Charter School Finance 2007 A 337 12/13/2007 UT Summit Academy 17.900 Unenhanced S&P BBB- F 6/15/2038 5.800 5.840 146 6.05% 2.63% 1.65% D.A. Davidson Authority 2007 B Michigan Public Educational Facilities 338 12/20/2007 MI American Montessori Academy 2007 3.900 Unenhanced NR NR F 12/1/2037 6.500 6.500 217 7.25% 7.69% 2.80% Fifth Third Securities Authority Cheyenne Mountain Colorado Educational and Cultural 2007 A 339 12/27/2007 CO 10.605 Moral Obligation S&P A F 6/15/2038 5.375 5.250 92 5.40% 2.92% 1.10% Wachovia Charter Academy Facilities Authority 2007 B Chester County Industrial 2007 A 340 12/28/2007 PA Avon Grove Charter School 20.900 Unenhanced S&P BB+ F 12/15/2037 6.375 6.450 212 6.65% 2.82% 1.50% PNC Development Authority 2007 B Pima County Industrial Development 341 1/1/20084 OH Constellation Schools 2008 24.595 Unenhanced NR NR F 1/1/2038 7.000 7.000 284 7.69% 7.80% 3.75% Dougherty Authority 2008 A 342 1/1/2008 TX Golden Rule Charter School Danbury Higher Education Authority 8.100 Unenhanced S&P BB+ F 8/15/2038 6.500 6.500 236 7.33% 7.63% 3.00% RBC Capital Markets 2008 B Griffin Foundation, Inc. Pima County Industrial Development 343 1/17/2008 AZ 2008 6.850 Unenhanced NR NR F 7/1/2038 6.625 6.625 245 7.22% 5.05% 2.54% RBC Capital Markets d/b/a Children Reaching for the Sky Authority Utah State Charter School Finance 2008 A 344 1/24/2008 UT Noah Webster Academy 9.800 Unenhanced NR NR F 6/15/2038 6.500 6.500 232 6.90% 4.90% 2.00% Baird Authority 2008 B Pikes Peak School of Expeditionary Colorado Educational and Cultural 345 1/25/2008 CO 2008 6.500 Unenhanced NR NR F 6/1/2038 6.625 6.625 174 Na Na Na Gates Capital Learning Facilities Authority Pima County Industrial Development 346 2/1/2008 AZ Success School, Superior School 2008 4.785 Unenhanced NR NR F 11/1/2038 6.750 Na Na 7.50% 7.38% 1.75% Piper Jaffray Authority Amigos Por Vida, Friends for Life Public La Vernia Higher Education Finance 347 2/1/2008 TX 2008 10.350 Unenhanced NR NR F 2/15/2037 6.375 6.375 226 6.46% 1.80% 1.25% Coastal Securities Charter School Corporation Colorado Educational and Cultural 348 2/20/2008 CO Community Leadership Academy 2008 8.810 Unenhanced NR NR F 7/1/2038 6.500 6.500 218 6.75% 3.49% 1.50% Wachovia Facilities Authority Idaho Housing and Finance 2008 A 349 2/26/2008 ID Idaho Arts Charter School, Inc. 7.320 Unenhanced S&P BB+ F 12/1/2038 6.500 6.500 214 6.90% 4.74% 2.00% Wachovia Association 2008 B Pima County Industrial Development 350 3/27/2008 AZ Valley Academy 2008 5.860 Unenhanced Moody’s Baa3 F 7/1/2038 6.500 6.450 153 6.90% 5.11% 2.00% RBC Capital Markets Authority Colorado Educational and Cultural 2008 A 351 4/8/2008 CO New Vision Charter School 4.810 Unenhanced NR NR F 4/1/2040 6.750 6.750 183 7.12% 3.85% 1.50% D.A. Davidson Facilities Authority 2008 B 2008 A High Tech High 352 4/29/2008 CA California Municipal Finance Authority 2008 B 23.515 Unenhanced Fitch BB+ F 7/1/2048 6.125 6.300 172 6.58% 4.29% 2.75% RBC Capital Markets (Chula Vista and Media Arts) 2008 C La Vernia Higher Education Finance 2008 A 353 5/1/2008 TX Harmony Schools 31.055 Unenhanced NR NR F 2/15/2038 7.125 7.250 266 7.68% 4.71% 3.21% Coastal Securities Corporation 2008 B North Carolina Capital Facilities 2008 A 354 5/16/20081 NC Lake Norman Charter School 20.000 Wachovia Bank S&P AA VR 7/1/2033 VR VR VR VR 1.28% 0.35% Wachovia Finance Agency 2008 B 2008 A 355 5/29/2008 ID Liberty Charter School, Inc. Idaho Housing & Finance Association 4.005 Unenhanced S&P BBB F 6/1/2038 6.000 6.000 154 6.53% 5.99% 2.00% Wachovia 2008 B APPENDIX C: CHARTER SCHOOL BOND ISSUANCE

Dated $ Par Credit Rating Initial Coupon Exempt Spread to All-In Lead Date State School Issuer Series Millions Enhancement Agency Rating Type Maturity Coupon Yield MMD Cost COI UD Underwriter Abby Kelley Foster Massachusetts Development Finance TD Banknorth 356 6/19/20081 MA 2008 35.000 Moody’s Aa2 VR 9/1/2038 VR VR VR VR 2.30% 0.40% RBC Capital Markets Charter Public School Agency NA 357 6/19/2008 MI Advanced Technology Academy Advanced Technology Academy 2008 13.455 Unenhanced S&P BBB- F 11/1/2037 6.000 6.140 158 6.45% 3.64% 1.50% Wachovia Pima County Industrial Development 2008 A 358 6/20/20084 NV Coral Academy of Science 7.690 Unenhanced NR NR F 12/1/2038 7.250 7.250 256 7.73% 5.51% 2.00% Wells Fargo Authority 2008 B South Carolina Jobs- Economic 359 7/10/2008 SC Brashier Charter LLC 2008 8.410 SunTrust Bank Moody’s Aa2 VR 12/1/2038 VR VR VR VR Na 0.46% SunTrust Robinson Humphrey Development Authority Utah State Charter School Finance 360 7/15/2008 UT Entheos Academy 2008 5.930 Unenhanced NR NR F 8/15/2038 6.750 Na Na Na Na Na Na Authority Michigan Public Educational Facilities 361 7/17/2008 MI Michigan Technical Academy 2008 3.885 Fifth Third Bank S&P AA- VR 2/1/2038 VR VR VR VR 10.39% 2.00% Fifth Third Securities Authority 2008 A 362 7/23/2008 ID Victory Charter School, Inc. Idaho Housing & Finance Association 3.965 Unenhanced S&P BBB- F 7/1/2038 6.125 6.190 163 6.71% 5.82% 2.00% Wachovia 2008 B Michigan Public Educational Facilities 363 8/1/2008 MI Chandler Park Academy 2008 8.465 Unenhanced S&P BBB F 11/1/2035 6.500 6.500 165 6.77% 3.98% 1.65% Fifth Third Securities Authority 2008 A 364 8/1/2008 MN St. Croix Preparatory Academy Baytown Township 21.725 Unenhanced NR NR F 8/1/2038 7.000 7.050 230 7.36% 4.43% 3.00% Dougherty 2008 B Orange County Educational Arts 2008 A 365 8/14/2008 CA California Municipal Finance Authority 10.515 Unenhanced NR NR F 10/1/2039 7.000 7.030 223 7.70% 6.48% 2.25% Wachovia Academy 2008 B Colorado Educational and Cultural 366 8/18/2008 CO Flagstaff Academy 2008 13.505 Unenhanced NR NR F 8/1/2038 7.000 7.000 220 7.17% 2.63% 1.45% D.A. Davidson Facilities Authority Utah State Charter School Finance 2008 A 367 8/19/2008 UT Rockwell Charter High School 14.100 Unenhanced NR NR F 8/15/2038 7.000 7.000 225 7.20% 2.78% 1.65% D.A. Davidson Authority 2008 B Colorado Educational and Cultural 368 8/26/2008 CO Academy of Charter Schools 2008 6.145 Moral Obligation S&P A F 5/1/2040 5.625 5.830 108 6.03% 2.64% 1.00% D.A. Davidson Facilities Authority Utah State Charter School Finance 2008 A 369 8/26/2008 UT George Washington Academy 9.975 Unenhanced NR NR F 7/15/2040 7.000 7.000 225 7.38% 4.76% 1.50% Piper Jaffray Authority 2008 B Pima County Industrial Development 370 8/27/20081,4 DE Delaware Military Academy 2008 12.200 PNC Bank NA S&P AA VR 9/1/2038 VR VR VR VR 5.80% 1.00% PNC Authority 371 9/18/20081 IL Prairie Crossing Charter School Illinois Finance Authority 2008 9.440 Marshall & Ilsley Moody’s Aa3 VR 9/1/2038 VR VR VR VR 5.27% 2.00% BMO Capital Markets GKST Colorado Educational and Cultural 2008 A 372 9/24/2008 CO Monument Academy 1.610 Unenhanced NR NR F 10/1/2039 7.250 7.250 265 7.75% 5.48% 1.50% D.A. Davidson Facilities Authority 2008 B Florida Development Finance 2008 A 373 9/30/2008 FL Sculptor Charter School 4.960 Unenhanced S&P BBB- F 10/1/2038 7.250 7.250 209 8.06% 6.94% 2.50% D.A. Davidson Corporation 2008 B Colorado Educational and Cultural 2008 A 374 10/30/2008 CO The Classical Academy 14.025 Moral Obligation S&P A F 12/1/2038 8.000 8.000 208 7.62% 2.14% 0.95% D.A. Davidson Facilities Authority 2008 B Phoenix Industrial Development 375 10/31/2008 AZ Arizona School for the Arts 2008 10.500 Unenhanced NR NR F 7/1/2048 8.250 7.250 189 Na 3.26% 1.50% Wedbush Morgan Authority 45 Appendix C 46 Appendix C

APPENDIX C: CHARTER SCHOOL BOND ISSUANCE

Dated $ Par Credit Rating Initial Coupon Exempt Spread to All-In Lead Date State School Issuer Series Millions Enhancement Agency Rating Type Maturity Coupon Yield MMD Cost COI UD Underwriter Colorado Educational and Cultural 2008 A 376 11/13/2008 CO North Star Academy 10.975 Unenhanced NR NR F 11/1/2039 8.250 8.250 303 8.56% 2.93% 1.65% D.A. Davidson Facilities Authority 2008 B Colorado Educational and Cultural 377 11/18/2008 CO Twin Peaks Charter Academy 2008 14.235 Moral Obligation S&P A F 11/15/2038 7.000 7.000 176 7.09% 2.14% 1.00% D.A. Davidson Facilities Authority Utah State Charter School Finance 378 11/20/2008 UT Venture Academy 2008 7.305 Unenhanced NR NR F 11/15/2038 6.750 Na Na Na Na Na Na Authority Colorado Educational and Cultural Fitch NR 379 12/2/2008 CO American Academy 2008 17.030 Moral Obligation F 12/1/2040 8.000 7.750 237 7.86% 2.27% 1.25% D.A. Davidson Facilities Authority S&P A Providence Creek Academy Charter 2008 A 380 12/18/20081 DE Kent County 13.150 PNC Bank Moody’s VMIG 1 VR 10/1/2038 VR VR VR VR 5.04% 0.75% PNC School, Inc. 2008 B Utah State Charter School Finance 381 12/18/2008 UT Legacy Preparatory Academy #1 2008 5.780 Unenhanced NR NR F 6/15/2038 6.750 6.750 Na Na Na Na Na Authority Utah State Charter School Finance 382 1/30/2009 UT Legacy Preparatory Academy #2 2009 7.800 Unenhanced NR NR F 6/15/2039 7.250 Na Na Na Na Na Na Authority 2009 A Lighthouse Academies, Inc. 383 2/11/2009 IN Indiana State Finance Authority 2009 B 15.435 Harris NA S&P A+ VR 2/1/2039 VR VR VR VR Na 0.50% BMO Capital Markets GKST (Monument, Gary, West Gary) 2009 C Tejano Center Community Concerns Clifton Higher Education Finance 2009 A 384 2/15/2009 TX 25.200 Unenhanced S&P BBB- F 2/15/2038 9.000 9.250 441 9.68% 5.19% 2.65% Piper Jaffray (Raul Yzaguirre School) Corporation 2009 B La Vernia Higher Education Finance 385 2/19/2009 TX Winfree Academy Charter School 2009 8.305 Unenhanced S&P BBB- F 8/15/2038 9.000 9.000 412 9.83% 6.95% 3.00% RBC Capital Markets Corporation 2009 A 386 3/1/2009 MN Prairie Seeds Academy Brooklyn Park 15.770 Unenhanced NR NR F 3/1/2039 9.250 9.250 441 9.69% 5.89% 4.00% Dougherty 2009 B American Preparatory Academy and Utah State Charter School Finance 387 3/9/2009 UT 2009 6.900 Unenhanced NR NR F 3/15/2039 8.000 8.000 318 8.36% 3.40% 0.72% DEPFA First Albany The School for New Americans Authority Idaho Housing and Finance 2009 A 388 3/10/2009 ID North Star Charter School, Inc. 11.775 Unenhanced S&P BB F 7/1/2039 9.500 9.500 466 9.98% 4.47% 1.75% Baird Association 2009 B Assured Guaranty/ Moody’s Aa2 389 3/19/20091 GA Lake Oconee Academy Greene County Development Authority 2009 17.205 F 2/1/2029 4.500 4.650 14 4.44% 3.42% 0.90% Morgan Keegan School District S&P AAA Pledge DaVinci Academy of Science and Utah State Charter School Finance 390 3/30/2009 UT 2009 6.950 Unenhanced NR NR F 3/15/2039 8.000 8.000 315 8.37% 3.43% 0.72% DEPFA First Albany the Arts Authority 391 4/1/2009 IL Namaste Charter School Illinois Finance Authority 2009 4.000 Unenhanced NR NR F 4/5/2025 VR VR VR Na Na Na MB Financial Bank 2009 A 392 5/13/2009 CA King-Chavez Academies California Municipal Finance Authority 8.895 Unenhanced S&P BBB- F 10/1/2039 8.750 8.750 426 Na Na Na Baird 2009 B Pima County Industrial Development 393 6/5/2009 AZ Arizona Academy of Leadership 2009 3.600 Unenhanced NR NR F 7/1/2036 7.750 7.750 315 8.47% 6.25% 1.00% Baird Authority Michigan Public Educational Facilities 394 6/9/2009 MI Bradford Academy 2009 10.720 Unenhanced S&P BBB- F 9/1/2039 8.750 8.750 410 9.23% 5.11% 2.50% Fifth Third Securities Authority APPENDIX C: CHARTER SCHOOL BOND ISSUANCE

Dated $ Par Credit Rating Initial Coupon Exempt Spread to All-In Lead Date State School Issuer Series Millions Enhancement Agency Rating Type Maturity Coupon Yield MMD Cost COI UD Underwriter Massachusetts Development Finance 2009 A 395 6/30/2009 MA SABIS International Charter School 33.755 Unenhanced S&P BBB F 4/15/2039 8.000 7.650 295 7.92% 3.33% 1.48% PNC Agency 2009 B 2009 A 396 7/1/2009 IN Irvington Community School Indiana State Finance Authority 8.145 Unenhanced S&P BBB- F 7/1/2039 9.000 8.400 370 9.11% 6.29% 2.00% Baird 2009 B St. Paul Housing and Redevelopment 397 7/1/2009 MN Higher Ground Academy 2009 4.300 Unenhanced NR NR F 12/1/2038 8.500 8.500 390 9.11% 6.60% 3.50% Dougherty Authority Idaho Housing and Finance 2009 A 398 7/8/2009 ID Victory Charter School, Inc. 0.855 Unenhanced S&P BBB- F 7/1/2039 8.250 8.300 364 9.95% 12.32% 2.00% Baird Association 2009 B Pima County Industrial Development 399 8/10/2009 AZ Berean Academy 2009 7.630 Unenhanced NR NR F 7/1/2039 8.850 8.250 356 9.28% 4.88% 1.75% D.A. Davidson Authority Pima County Industrial Development 400 8/31/2009 AZ Legacy Traditional Charter School 2009 16.040 Unenhanced NR NR F 7/1/2039 8.500 8.500 398 8.93% 3.87% 2.25% D.A. Davidson Authority 2009 A Oak Cliff Academy, Tarrant County Cultural Education 401 8/31/2009 TX 2009 B 5.880 Unenhanced S&P BBB- F 6/1/2039 7.750 7.750 321 Na 6.14% 1.96% Gates Capital dba Trinity Basic Preparatory Facilities Finance Corporation 2009 C Crowne Point Colorado Educational and Cultural 402 10/1/2009 CO 2009 7.755 Moral Obligation Fitch A F 7/15/2039 5.000 5.250 130 5.50% 4.38% 2.00% D.A. Davidson Academy of Westminster Facilities Authority La Vernia Higher Education Finance 2009 A Third-party Fitch BBB 403 11/19/2009 TX KIPP Inc. 66.865 F 8/15/2044 6.375 6.400 218 6.55% 3.11% 1.38% RBC Capital Markets Corporation 2009 B Guaranty S&P BBB IDEA Public Schools (Donna, Frontier, Pharr, TX Higher Education Finance 2009 A 404 12/10/2009 TX Quest, Mission, San Benito, San Juan, 29.625 Unenhanced S&P BBB F 8/15/2039 6.500 6.550 224 6.66% 3.58% 1.56% Baird Authority 2009 B Alamo, Pharr) 2009 A 405 12/22/2009 IN Thea Bowman Leadership Academy Indiana State Finance Authority 19.355 Unenhanced S&P BBB- F 10/1/2039 7.000 7.000 289 7.28% 4.12% 2.25% RBC Capital Markets 2009 B Phoenix, AZ Industrial Development 406 12/23/2009 AZ Career Success Schools 2009 11.225 Unenhanced S&P BBB- F 1/1/2045 7.125 7.250 313 7.60% 4.67% 2.00% Ziegler Authority Greater Brunswick Regional Charter 407 12/24/2009 NJ New Jersey Redevelopment Authority 2009 6.550 Unenhanced NR NR VR Na VR VR VR VR Na Na Sun National Trust School Colorado Educational and Cultural 408 1/13/2010 CO Pinnacle Charter School, Inc. 2010 12.985 Moral Obligation Fitch A F 12/1/2039 5.125 5.510 139 5.64% 2.90% 1.50% D.A. Davidson Facilities Authority Michigan Public Educational Facilities 409 1/21/2010 MI Landmark Academy 2010 15.290 Unenhanced S&P BBB- F 12/1/2039 7.000 7.000 293 7.32% 4.57% 2.06% Piper Jaffray Authority Michigan Public Educational Facilities 410 1/28/2010 MI Madison Academy 2010 7.110 Unenhanced NR NR F 12/1/2039 8.625 8.625 457 9.28% 6.86% 2.50% Piper Jaffray Authority Colorado Educational and Cultural 411 2/25/2010 CO Colorado Springs Charter Academy 2010 7.355 Moral Obligation S&P A F 7/1/2040 5.500 5.750 157 6.02% 4.65% 1.75% Gates Capital Facilities Authority Colorado Educational and Cultural 412 2/25/2010 CO High Point Academy 2010 11.930 Moral Obligation S&P A F 3/1/2040 6.250 5.300 111 5.73% 2.99% 1.50% D.A. Davidson Facilities Authority Philadelphia Authority for Industrial 413 2/25/2010 PA MaST Community Charter School 2010 15.880 Unenhanced S&P BBB+ F 8/1/2035 6.000 6.050 198 6.29% 3.22% 1.50% PNC Development 47 Appendix C 48 Appendix C

APPENDIX C: CHARTER SCHOOL BOND ISSUANCE

Dated $ Par Credit Rating Initial Coupon Exempt Spread to All-In Lead Date State School Issuer Series Millions Enhancement Agency Rating Type Maturity Coupon Yield MMD Cost COI UD Underwriter Phoenix Industrial Development 2010 A 414 3/5/2010 AZ EAGLE College Prep 7.010 Unenhanced NR NR F 7/1/2040 7.750 7.750 359 Na 7.10% 3.00% RBC Capital Markets Authority 2010 B Lowell Middlesex Academy Charter Massachusetts Development Finance 415 3/15/2010 MA 2010 2.610 Unenhanced NR NR F Na Na Na Na Na Na Na Na School Agency Maryland Health & Higher Educational 2010 A 416 3/16/2010 MD Patterson Park Public Charter School 13.665 Unenhanced Fitch BBB F 7/1/2045 6.125 6.200 204 6.61% 6.24% 2.25% RBC Capital Markets Facilities Authority 2010 B Florence Industrial Development 417 3/18/2010 AZ BASIS School, Inc. 2010 5.450 Unenhanced NR NR F 7/1/2040 7.750 7.750 360 8.38% 5.89% 2.50% RBC Capital Markets Authority Sterling Montessori Academy & Charter North Carolina Capital Facilities Branch Banking Aa2/ 418 3/18/20101 NC 2010 10.610 Moody’s VR 3/1/2031 VR VR VR VR 4.52% 1.00% Zions First National Bank School Finance Agency and Trust Co. VMIG 1 Michigan Public Educational Facilities 419 3/19/2010 MI New Branches School 2010 2.410 Unenhanced S&P BBB- F 5/1/2035 7.625 7.625 357 8.40% 7.79% 1.80% Stifel Nicolaus Authority Texas Public Finance Authority, 420 3/25/2010 TX Nova Academy 2010 6.375 Unenhanced S&P BBB F 8/15/2034 6.375 6.375 234 6.91% 7.20% 3.00% RBC Capital Markets Charter School Finance Corporation California Statewide Communities PCSD Guaranty 421 4/1/2010 CA Aspire Public Schools 2010 93.295 Fitch BBB F 7/1/2046 6.125 6.350 218 6.41% 2.13% 1.25% RBC Capital Markets Development Authority Pool I LLC Pima County Industrial Development 422 4/6/2010 AZ Flagstaff Arts and Leadership Academy 2010 4.125 Unenhanced NR NR F 7/1/2040 7.785 7.785 371 9.08% 10.75% 3.50% Dougherty Authority Clifton Higher Education Finance 2010 A 423 4/8/2010 TX Uplift Education 56.835 Unenhanced S&P BBB- F 12/1/2045 6.250 6.400 223 6.49% 3.04% 1.65% Baird Corporation 2010 B Pima County Industrial Development 424 4/13/2010 AZ Cambridge Academy-East, Inc. 2010 8.445 Unenhanced Fitch BBB- F 4/1/2040 6.625 6.625 246 7.08% 5.41% 2.25% D.A. Davidson Authority Caurus Academy (Arizona Montessori Pima County Industrial Development 425 4/20/2010 AZ 2010 4.380 Unenhanced NR NR F 10/1/2045 7.250 7.250 308 Na 14.14% Na Lawson Financial School of Anthem) Authority Michigan Public Educational Facilities 426 4/27/2010 MI Oakland International Academy 2010 3.005 Unenhanced S&P BBB- F 2/1/2030 7.850 7.850 400 8.74% 7.58% 2.00% Stifel Nicolaus Authority Dr. Joseph F. Pollack Academic Center Michigan Public Educational Facilities 427 4/28/2010 MI 2010 8.390 Unenhanced S&P BB+ F 4/1/2040 8.000 8.125 403 8.70% 5.67% 2.25% Piper Jaffray of Excellence Authority Texas Public Finance Authority 428 5/6/2010 TX Harmony Schools 2010 A 50.090 Unenhanced S&P BBB F 2/15/2040 6.200 6.200 214 Na 1.48% 1.00% Morgan Keegan Charter School Finance Corporation Pima County Industrial Development 429 5/12/2010 AZ Odyssey Preparatory Academy, Inc. 2010 A 7.700 Unenhanced NR NR F 5/1/2040 8.000 8.000 401 8.62% 5.73% 2.25% D.A. Davidson Authority Pima County Industrial Development 430 5/13/2010 AZ Academy of Tucson 2010 9.385 Unenhanced NR NR F 7/1/2040 7.000 7.000 296 7.58% 5.81% 3.00% RBC Capital Markets Authority 2010 A 431 5/20/2010 NJ Central Jersey Arts Charter School New Jersey Redevelopment Authority 8.200 Unenhanced NR NR F 5/1/2035 7.750 7.750 377 8.30% 4.94% 0.60% Powell Capital 2010 B 2010 A Pima County Industrial Development 432 5/26/2010 AZ Montessori Academy, Inc. 2010 B 5.725 Unenhanced NR NR F 11/1/2040 7.250 7.250 332 Na 10.48% Na Lawson Financial Authority 2010 C APPENDIX C: CHARTER SCHOOL BOND ISSUANCE

Dated $ Par Credit Rating Initial Coupon Exempt Spread to All-In Lead Date State School Issuer Series Millions Enhancement Agency Rating Type Maturity Coupon Yield MMD Cost COI UD Underwriter Utah State Charter School Finance 433 6/3/2010 UT Paradigm High School 2010 9.540 Unenhanced S&P BBB- F 7/15/2040 6.375 6.500 254 7.03% 6.04% 2.00% Piper Jaffray Authority 2010 A 434 6/10/2010 AK Benton County School of the Arts Benton County Public Facilities Board 7.580 Unenhanced S&P BBB F 6/1/2040 6.000 6.150 214 6.48% 4.89% 2.00% Ziegler 2010 B 435 6/28/2010 FL Sarasota School of Arts and Sciences Sarasota County 2010 11.040 Unenhanced S&P BBB- F 7/1/2040 6.500 6.650 257 6.94% 3.99% 1.75% PNC Utah State Charter School Finance 436 6/28/2010 UT North Davis Preparatory Academy, Inc. 2010 15.335 Unenhanced S&P BBB- F 7/15/2040 6.375 6.450 237 6.80% 4.28% 1.75% Piper Jaffray Authority Pima County Industrial Development 437 6/30/2010 AZ Destiny Community School 2010 4.000 Unenhanced NR NR F 8/1/2040 7.250 7.250 320 Na 14.38% Na Lawson Financial Authority 438 7/2/2010 MI Madison Academy Michigan Finance Authority 2010 A 3.845 Unenhanced NR NR F 12/1/2039 8.250 8.250 422 9.06% 8.25% 2.50% Piper Jaffray Colorado Educational and Cultural 439 7/7/2010 CO Free Horizon Montessori School 2010 6.550 Moral Obligation S&P A F 6/15/2040 6.125 5.500 148 5.96% 4.24% 2.00% D.A. Davidson Facilities Authority Texas Public Finance Authority 2010 A 440 8/4/2010 TX Odyssey Academy, Inc. 9.955 Unenhanced S&P BBB- F 2/15/2040 7.125 6.500 253 Na 7.80% 3.00% Piper Jaffray Charter School Finance Corporation 2010 B 2010 A BB+ Propel Schools Allegheny County Industrial 441 8/5/2010 PA 2010 B 14.140 Unenhanced S&P BBB- F 8/15/2035 6.750 6.820 290 6.87% 3.39% 1.45% PNC (Montour, McKeesport, East) Development Authority 2010 C BBB- 442 8/31/2010 DE Delaware College Preparatory Academy City of Wilmington 2010 3.610 Unenhanced NR NR F 8/1/2035 7.625 7.625 400 8.56% 9.70% 3.50% Gates Capital 2010 A 443 9/14/2010 FL Bay Haven Charter Academy, Inc. Bay County 11.755 Unenhanced S&P BBB F 9/1/2040 6.000 5.800 211 5.89% 2.32% 1.25% Merchant Capital 2010 B 444 9/17/2010 MI Will Carleton Charter School Academy Will Carleton Charter School Academy 2010 2.200 Unenhanced NR NR F 8/1/2035 8.000 8.250 459 8.91% 4.74% 2.50% Stifel Nicolaus 2010 A 445 9/21/2010 ID Compass Public Charter School, Inc. Idaho Housing & Finance Association 5.155 Unenhanced S&P BBB- F 7/1/2045 6.250 5.950 223 6.56% 6.31% 2.00% Baird 2010 B Utah State Charter School Finance 2010 A 446 9/21/2010 UT Navigator Pointe Academy 5.360 Unenhanced S&P BBB F 7/15/2040 5.625 5.700 197 6.21% 6.53% 2.00% Piper Jaffray Authority 2010 B 2010 A 447 9/22/2010 CA Literacy First Charter School California Municipal Finance Authority 3.725 Unenhanced S&P BBB- F 9/1/2030 6.000 5.850 252 7.13% 10.68% 3.50% Ziegler 2010 B Dorchester Collegiate Academy Charter Massachusetts Development Finance 448 9/23/2010 MA 2010 1.080 Unenhanced NR NR F Na Na Na Na Na Na Na Boston Private Bank School Agency 449 9/29/2010 MI Hanley International Academy, Inc. Michigan Finance Authority 2010 A 5.785 Unenhanced S&P BBB- F 9/1/2040 6.125 6.125 243 6.61% 5.88% 2.52% Piper Jaffray Delaware County Industrial 2010 A 450 10/19/2010 PA Chester Community Charter School 57.395 Unenhanced Fitch BBB F 8/15/2040 6.125 5.850 212 6.04% 2.89% 1.66% D.A. Davidson Development Authority 2010 B Pima County Industrial Development 451 10/20/2010 AZ Paradise Education Center 2010 12.800 Unenhanced S&P BBB- F 6/1/2045 6.100 6.100 236 6.43% 4.86% 2.25% RBC Capital Markets Authority Florida Development Finance 2010 A 452 10/20/2010 FL Renaissance Charter School, Inc. 68.200 Unenhanced Fitch BBB F 9/15/2040 6.000 6.000 227 6.53% 3.27% 1.88% Ziegler Corporation 2010 B Texas Public Finance Authority 2010 A 453 10/20/2010 TX New Frontiers Charter School 3.620 Unenhanced S&P BBB F 8/15/2040 5.800 5.800 207 Na 13.78% 2.52% Baird Charter School Finance Corporation 2010 B 49 Appendix C 50 Appendix C

APPENDIX C: CHARTER SCHOOL BOND ISSUANCE

Dated $ Par Credit Rating Initial Coupon Exempt Spread to All-In Lead Date State School Issuer Series Millions Enhancement Agency Rating Type Maturity Coupon Yield MMD Cost COI UD Underwriter Colorado Educational and Cultural 454 10/22/2010 CO Parker Core Knowledge Charter School 2010 2.435 Moral Obligation S&P A F 11/1/2040 6.000 5.250 148 5.81% 4.86% 1.35% D.A. Davidson Facilities Authority Texas Public Finance Authority 2010 A 455 10/22/2010 TX Evolution Academy Charter School 4.815 Unenhanced S&P BBB- F 8/1/2040 6.500 6.500 279 Na 10.13% 3.25% RBC Capital Markets Charter School Finance Corporation 2010 B 2010 A 456 10/28/2010 FL Miami Community Charter School, Inc. Capital Trust Agency 7.700 Unenhanced NR NR F 10/15/2040 7.000 7.000 325 8.09% 9.43% 2.25% Piper Jaffray 2010 B Global Leadership Academy Charter Philadelphia Authority for Industrial 457 11/9/2010 PA 2010 13.875 Unenhanced S&P BBB- F 11/15/2040 6.375 5.970 211 6.33% 3.65% 1.75% PNC School Development Pima County Industrial Development 2010 A 458 11/10/2010 AZ Sequoia Pathway Academy 13.450 Unenhanced NR NR F 9/1/2040 7.250 7.250 360 Na 9.25% Na Lawson Financial Authority 2010 B Duluth Housing & Redevelopment 2010 A 459 11/10/2010 MN Duluth Edison Charter Schools 18.400 Unenhanced S&P BBB- F 11/1/2040 5.875 6.000 210 6.20% 4.89% 2.25% Dougherty Authority 2010 B Florence Industrial Development 460 11/17/2010 AZ BASIS School, Inc. (Chandler) 2010 A 6.645 Unenhanced NR NR F 7/1/2041 7.000 4.000 7 6.94% 3.95% 1.75% RBC Capital Markets Authority Florence Industrial Development 461 11/17/2010 AZ BASIS School, Inc. (Peoria) 2010 B 6.665 Unenhanced NR NR F 7/1/2041 7.000 4.000 Na 6.85% 2.91% 1.75% RBC Capital Markets Authority 2010 A 462 11/17/2010 MI Old Redford Academy Michigan Finance Authority 14.285 Unenhanced NR NR F 12/1/2040 6.500 6.200 230 6.57% 4.43% 2.20% Baird 2010 B Colorado Educational and Cultural 2010 A 463 11/19/2010 CO Caprock Academy 9.865 Unenhanced NR NR F 6/1/2045 7.000 7.100 268 7.48% 3.86% 1.50% Baird Facilities Authority 2010 B Charter School of Educational Yonkers Economic Development 2010 A 464 11/19/2010 NY 12.445 Unenhanced S&P BB+ F 10/15/2040 6.250 6.250 208 6.72% 6.81% 1.65% Baird Excellence Corporation 2010 B Colorado Educational and Cultural 2010 A Fitch NR 465 11/23/2010 CO The Academy of Charter Schools 10.060 Unenhanced F 11/1/2040 6.250 6.250 163 6.97% 3.06% 1.45% D.A. Davidson Facilities Authority 2010 B S&P A Massachusetts Development Finance 466 11/30/2010 MA Foxborough Regional Charter School 2010 26.600 Unenhanced S&P BBB F 7/1/2042 7.000 7.000 250 7.07% 2.00% 0.62% Morgan Keegan Agency 467 11/30/2010 MI Universal Learning Academy Michigan Finance Authority 2010 10.435 Unenhanced S&P BBB- F 11/1/2040 7.500 7.500 300 7.78% 3.90% 1.75% Piper Jaffrey

Pulaski Charter School Arkansas Development Finance 12/2/20101,3 AK 2010 C 3.795 S&P A F 12/1/2035 5.000 5.100 84 5.69% 6.05% 1.70% Crew d/b/a Academics Plus Charter School Authority Unenhanced 468 Pulaski Charter School Arkansas Development Finance 12/2/20103 AK 2010 D 2.570 Unenhanced NR NR F 12/1/2035 5.875 6.000 174 Na Na Na Crew d/b/a Academics Plus Charter School Authority

Florence Industrial Development 469 12/7/2010 AZ Scottsdale Preparatory Academy 2010 11.630 Unenhanced NR NR F 7/1/2041 6.750 5.500 Na 6.98% 4.23% 2.40% RBC Capital Markets Authority San Juan Higher Education Finance 2010 A 470 12/7/2010 TX IDEA Public Schools 33.900 Unenhanced S&P BBB F 8/15/2040 6.700 6.700 220 Na 2.35% 1.15% Baird Authority 2010 B Seminole County Industrial 471 12/10/2010 FL Choices in Learning Charter School 2010 A 9.900 Unenhanced S&P BBB- F 11/15/2041 7.375 6.800 246 7.41% 5.32% 1.75% PNC Development Authority APPENDIX C: CHARTER SCHOOL BOND ISSUANCE

Dated $ Par Credit Rating Initial Coupon Exempt Spread to All-In Lead Date State School Issuer Series Millions Enhancement Agency Rating Type Maturity Coupon Yield MMD Cost COI UD Underwriter Florence Industrial Development 472 12/16/2010 AZ BASIS School, Inc. (Flagstaff) 2010 C 6.995 Unenhanced NR NR F 7/1/2041 7.000 4.000 Na 6.92% 3.43% 1.75% RBC Capital Markets Authority Colorado Educational and Cultural 473 12/16/2010 CO Rocky Mountain Academy of Evergreen 2010 A 5.085 Moral Obligation S&P A F 11/1/2040 6.450 6.900 256 Na 5.33% 2.00% Stern Agee Leach Facilities Authority 2010 A Arlington Higher Education Finance 474 12/21/2010 TX Arlington Classics Academy 2010 B 16.405 Unenhanced S&P BB+ F 8/15/2040 7.650 7.650 304 8.31% 6.04% 3.00% Piper Jaffray Corporation 2010 C Utah State Charter School Finance 2010 A 475 12/21/2010 UT North Star Academy 7.640 Unenhanced S&P BBB- F 7/15/2045 7.000 7.000 239 7.39% 4.70% 1.75% Piper Jaffray Authority 2010 B Utah State Charter School Finance 476 12/21/2010 UT Oquirrh Mountain Charter School 2010 12.090 Unenhanced NR NR F 7/15/2041 8.000 8.000 339 8.43% 4.65% 2.00% Piper Jaffray Authority Utah State Charter School Finance 477 12/23/2010 UT Hawthorn Academy 2010 13.495 Unenhanced NR NR F 7/15/2046 8.250 8.500 372 8.91% 4.67% 2.00% Piper Jaffray Authority Utah State Charter School Finance 478 12/30/2010 UT Early Light Academy, Inc. 2010 13.330 Unenhanced NR NR F 7/15/2046 8.500 8.500 372 8.88% 4.47% 1.85% Piper Jaffray Authority Total/Average 5,013.841 6.610 6.590 204 7.18% 6.02% 2.36%

General Methodology & Terminology Notes

- Issues are arranged in chronological ascending order. 1 Costs of issuance includes credit enhancement fees, including insurance premiums, letter of credit fees or guarantee fees, as - Par amounts include both taxable and tax-exempt portions of an issuance, as applicable. applicable. - “NR” means not rated. 2 Series is part of a single issue with multiple series for two charter school borrowers with different cost and pricing variables. - “Fitch” is Fitch Ratings; “Moody’s” is Moody’s Investors Service; “S&P” is Standard & Poor’s. 3 Series is part of a single issue that consists of a rated and an unrated series with different cost and pricing variables. - “Na” means not available. 4 Bonds issued by an out-of-state issuer. - In the “Coupon Type” column, “F” means fixed-rate and “VR” means variable-rate. - Data in the “Coupon,” “Yield” and “Spread to MMD” columns is for the longest bond in the offering. A downloadable spreadsheet is available at http://www.lisc.org/effc/bondhistory. - “Spread to MMD” means spread to the triple-A MMD and is measured in basis points. - “COI” means costs of issuance and is calculated as a percentage of the par amount of the offering. - “UD” means underwriter’s discount and is calculated as a percentage of the par amount of the offering. - “All-In Cost” is the overall borrowing cost for the offering, which takes into account the issue’s amortization schedule, interest rates and costs of issuance. - National Finance Guarantee Corp. was formerly MBIA Insurance Corp. of Illinois and is listed here as “National (MBIA)”. - Syncora Guarantee Inc. was formerly XL Capital Assurance Inc. and is listed here as “Syncora (XL)”. 51 Appendix C 52 Appendix D APPENDIX D APPENDIX D: DEFAULTED CHARTER SCHOOL BONDS

Age at Issuance Enrollment at School, Issuer, Series Dated Date State Par Millions Lead Underwriter Initial Rating Year Opened (Years) Issuance Village School of Northfield, City of Northfield 1 12/1/1999 MN $1.320 John G. Kinnard Not Rated 1997 2.3 57 Series 1999 A & B Sankofa Shule, Sankofa Shule Ba1 2 6/1/2000 MI $2.555 Miller, Johnson & Kuehn 1995 4.8 149 Certificates of Participation, Series 2000 (Moody’s) Sauk Trail Academy, Sauk Trail Academy 3 6/1/2001 MI $2.480 Miller Johnson Steichen Kinnard Not Rated 1997 3.8 130 Certificates of Participation, Series 2001 Life School College Preparatory, Inc. 4 Pima County Industrial Development Authority 8/17/2001 AZ $12.000 Wedbush Morgan Not Rated 1999 2.0 1,025 Series 2001 A & B Discovery Elementary School, Discovery Elementary School 5 10/1/2001 MI $1.820 Miller Johnson Steichen Kinnard Not Rated 1996 5.1 98 Certificates of Participation, Series 2001 Central New York Charter School for Math and Science 6 Onondaga County Industrial Development Agency 1/1/2002 NY $6.600 Miller Johnson Steichen Kinnard Not Rated 2000 1.3 490 Series 2002 A & B West Houston Charter Alliance (Katy Creative Arts) 7 Danbury Higher Education Authority 2/1/2002 TX $2.830 Miller Johnson Steichen Kinnard Not Rated 1996 5.4 195 Series 2002 A & B Kalamazoo Advantage Academy 8 Kalamazoo Advantage Academy 12/1/2003 MI $5.555 Herbert J. Sims Not Rated 1998 5.3 381 Certificates of Participation, Series 2003 Desert Technology Schools 9 Pima County Industrial Development Authority 2/1/2004 AZ $3.585 Dougherty Not Rated 1998 5.4 222 Series 2004 A New Covenant Charter School 10 Albany Industrial Development Agency 5/1/2005 NY $16.605 Herbert J. Sims Not Rated 1999 5.7 783 Series 2005 A & B Minnesota Business Academy 11 St. Paul Housing and Redevelopment Authority 7/1/2005 MN $6.580 Dougherty Not Rated 2000 4.8 292 Series 2005 A & B Premier and Air Academy Charter High Schools 12 Pima County Industrial Development Authority 9/1/2005 AZ $10.895 Dougherty Not Rated 2001 4.0 457 Series 2005 Palm Bay Community Charter School - Patriot 13 Palm Bay City 4/3/2006 FL $21.100 Gates Capital Not Rated 2006 (0.4) 0 Series 2006 A & B Crescent Academy, Crescent Academy 14 12/1/2006 MI $7.090 Herbert J. Sims Not Rated 2004 2.3 358 Certificates of Participation, Series 2006 Challenges, Choices, & Images D.A. 15 Colorado Educational and Cultural Facilities Authority 4/18/2007 CO $18.430 Not Rated 2000 6.6 319 Davidson Series 2007 A & B APPENDIX D: DEFAULTED CHARTER SCHOOL BONDS

Charter Term Default from Default from Principal School, Issuer, Series DSCR1 Debt Burden2 (Years) Charter Status Default Year Opening (Years) Issuance (Years) Recovery Village School of Northfield, City of Northfield Revoked by 1 1.14 25.2% 3 2007 9.8 7.5 18.4% Series 1999 A & B Authorizer Sankofa Shule, Sankofa Shule Non-Renewal by 2 1.46 13.7% 5 2007 11.8 7.1 Not Applicable Certificates of Participation, Series 2000 Authorizer Sauk Trail Academy, Sauk Trail Academy 3 1.78 18.1% 10 Still in Effect 2004 6.5 2.8 Not Applicable Certificates of Participation, Series 2001 Life School College Preparatory, Inc. Revoked by 4 Pima County Industrial Development Authority 3.25 24.7% 15 2007 7.8 5.9 59.6% Authorizer Series 2001 A & B Discovery Elementary School, Discovery Elementary School Voluntarily 5 1.25 15.3% 1 2009 9.8 7.7 Not Applicable Certificates of Participation, Series 2001 Surrendered Central New York Charter School for Math and Science Revoked by 6 Onondaga County Industrial Development Agency 1.50 18.4% 5 2005 8.9 5.6 41.2% Authorizer Series 2002 A & B West Houston Charter Alliance (Katy Creative Arts) 7 Danbury Higher Education Authority 2.49 17.8% 15 Still in Effect 2005 8.8 3.4 Not Applicable Series 2002 A & B Kalamazoo Advantage Academy Non-Renewal by 8 Kalamazoo Advantage Academy 1.08 11.0% 10 2008 9.9 4.7 22.6% Authorizer Certificates of Participation, Series 2003 Desert Technology Schools Voluntarily 9 Pima County Industrial Development Authority 1.70 16.8% 15 2008 9.6 4.2 Not Applicable Surrendered Series 2004 A New Covenant Charter School Non-Renewal by 10 Albany Industrial Development Agency 2.03 14.4% 5 2007 7.6 1.9 Not Applicable Authorizer Series 2005 A & B Minnesota Business Academy Voluntarily 11 St. Paul Housing and Redevelopment Authority 1.29 16.5% 3 2006 5.7 0.7 50.0% Surrendered Series 2005 A & B Premier and Air Academy Charter High Schools Voluntarily 12 Pima County Industrial Development Authority 1.39 19.7% 15 2008 6.8 2.8 Not Applicable Surrendered Series 2005 Palm Bay Community Charter School - Patriot 13 Palm Bay City 1.10 17.7% 15 Still in Effect 2008 2.3 2.7 25.9% Series 2006 A & B Crescent Academy, Crescent Academy 14 1.18 14.9% 8 Still in Effect 2007 2.7 0.5 39.9% Certificates of Participation, Series 2006 Challenges, Choices, & Images Revoked by 15 Colorado Educational and Cultural Facilities Authority Not Available Not Available 5 2008 7.8 1.2 70.0% Authorizer Series 2007 A & B 53 Appendix D 54 Appendix D

APPENDIX D: DEFAULTED CHARTER SCHOOL BONDS

School, Issuer, Series Status of Facility Reason for Default Village School of Northfield, City of Northfield Charter was revoked by school board in 2006 due to the school’s failure to 1 Facility was sold in February 2011 for $227,340 to Northfield Hospital. Notes Series 1999 A & B implement the state standardized curriculum. Sankofa Shule, Sankofa Shule Charter was not renewed by authorizer due to steep enrollment decline, high 1 2 Building is still for sale with an asking price of $1.45 million. Debt service coverage ratio Certificates of Participation, Series 2000 teacher turnover and fiscal mismanagement. (DSCR) for first full year of School continues to operate in the facility but makes only partial debt service debt service with no capitalized Sauk Trail Academy, Sauk Trail Academy Inadequate student enrollment due to loss of auto manufacturing jobs has resulted 3 payments as current enrollment is reportedly still below 100. Since August 2006, the interest. Certificates of Participation, Series 2001 in insufficient net revenue available for debt service. school has operated under a forbearance agreement. 2 Debt burden figures represent Life School College Preparatory, Inc. State revoked charter due to mismanagement which included an “unprecedented percent of revenues dedicated 4 Pima County Industrial Development Authority Facility was sold in 2008 for approximately $8.1 million. overstatement of enrollment.” to debt service and lease Series 2001 A & B expense in first full year of Declining student enrollment due to sluggish economy, which forced many Discovery Elementary School, Discovery Elementary School debt service with no capitalized 5 School has closed and the facility is currently for sale for $575,000. families to move out of the area, resulted in insufficient net revenue available to Certificates of Participation, Series 2001 interest. service school’s debt. Central New York Charter School for Math and Science 6 Onondaga County Industrial Development Agency Facility was sold at auction in August 2007 for $2.5 million to Loon Creek Properties. Charter was revoked by state authorizer due to poor academic performance. A downloadable Series 2002 A & B spreadsheet is available at West Houston Charter Alliance (Katy Creative Arts) Significantly lower enrollment than projected, exacerbated by the elimination of http://www.lisc.org/effc/ 7 Danbury Higher Education Authority School continues to operate in the facility, making partial debt service payments. high school grades, has reduced overall revenue. Series 2002 A & B bondhistory. Kalamazoo Advantage Academy Building was sold to Peregrine Realty in late 2009 for approximately $746,000. Charter was not renewed by authorizer due to falling enrollment and low test 8 Kalamazoo Advantage Academy Peregrine plans to reconvert the building into retail space, along with parking and scores. The school closed in August 2008. Certificates of Participation, Series 2003 rental apartments. Desert Technology Schools Steep enrollment decline reportedly due to economy, particularly the loss of 9 Pima County Industrial Development Authority Building still for sale with an asking price of $900,000. construction jobs. Series 2004 A New Covenant Charter School 10 Albany Industrial Development Agency Facility is currently empty, awaiting listing contract with real estate firm. Charter was not renewed by state authorizer due to poor academic performance. Series 2005 A & B Minnesota Business Academy Financial stress caused by inadequate enrollment reportedly due to gang-related 11 St. Paul Housing and Redevelopment Authority Facility was sold in June 2007 for approximately $3.29 million. issues. School voluntarily closed at end of 2005-2006 school year. Series 2005 A & B Premier and Air Academy Charter High Schools Facility was recently sold to another charter school, Riverbend Prep, for $4.2 million 12 Pima County Industrial Development Authority through partial exchange of new tax-exempt bonds (2/8/11). Balance (61%) of the Air Academy closed its doors in 2008 due to financial mismanagement. Series 2005 Series 2005 bonds remains outstanding and is being serviced by Premier Academy. Palm Bay Community Charter School - Patriot School continues to operate in the facility but has not made payments since 13 Palm Bay City Lower enrollment than projected causing strained financial position. December 2008. A forbearance agreement has been entered into. Series 2006 A & B Shortly after bond issuance, authorizer threatened to revoke the school’s charter Crescent Academy, Crescent Academy 14 Crescent Academy continues to operate the facility. due to its failure to obtain authorizer approval for the offering and other issues. Certificates of Participation, Series 2006 Bonds were unwound in 2008 pursuant to a partial refunding. Challenges, Choices, & Images Authorizer terminated charter when fiscal improprieties were discovered, as well 15 Colorado Educational and Cultural Facilities Authority Another charter school, Amandia Academy, now occupies the facility. as management problems, e.g. criminal convictions of faculty, and poor academic Series 2007 A & B results.

June 2011

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