The Situation
Renaissance Charter School, Inc., based in Fort Lauderdale, is one of Florida’s largest charter school entities. Partnering with its professional management organization, Charter Schools USA, they have grown from a single school in Doral to more than 30 schools serving more than 25,000 students across the state.
The Challenge
In 2014, having issued a separate series of bonds in each of the previous four years, Renaissance was again in the process of expanding. They needed additional capital to facilitate the opening of three new schools.
Given the new schools’ lack of operating history and existing capital structure, Renaissance again turned to the fixed-rate debt markets, hoping to uncover additional buyers to deepen its pool of potential investors and thus lower the interest paid by the borrower.
The Hamlin Solution
For the first time in their history, Renaissance and Charter Schools USA turned to a financial advisor, Hamlin Capital Advisors, to serve as their advisor on the Series 2014 bonds. In this capacity, Hamlin helped them prepare and host an investor presentation and Q&A session, answer post-call investor questions, host multiple investor site visits, and called on additional investors who had not participated in previous Renaissance offerings. With these steps, we were able to help them achieve their objective of increasing the number of prospective buyers for their bonds.
When the final pricing bids came in, the rate was more than 50 basis points (0.50%) lower than the original estimate. In addition, the deal was oversubscribed with orders from investors, which led the underwriter to lower the 30-year rate even further—providing a lower overall debt service for the schools. Most importantly, we helped them identify a completely new investor, which enabled the bonds to be sold on schedule and avoided a delay in pricing.
