PRESS RELEASE
7/10/07
Contact: Charity Sack, (703) 647-2337

Department Of Education Awards $15 Million For Innovative Charter School Financing

NCB Capital Impact joins Charter School Financing Partnership to leverage
$150 million for charter school facilities

WASHINGTON, July 10 — Housing Partnership Network Inc. (HPN), an industry leader in peer exchange and management of cooperative efforts, was recently awarded $15 million through the Department of Education’s (DOE) Credit Enhancement for Charter School Facilities Grants program to work with nonprofit financial institutions including DC-based NCB Capital Impact to develop innovative financing alternatives for charter schools.

With this grant, HPN and NCB Capital Impact formed a new consortium, the Charter School Financing Partnership (CSFP), along with Raza Development Fund, The Reinvestment Fund and Community Reinvestment Fund. CSFP will pioneer the use of securitization for charter schools by accumulating tax-exempt debt and selling securities backed by the debt into the capital markets, allowing for $150 million in private sector capital to be leveraged for charter school facilities financing. CSFP will create access to permanent, affordable financing for between 12,000 and 15,000 students in low- to moderate-income communities on more flexible terms than current alternatives.

“Our objective is to open the door for a greater number of charter schools to the tax-exempt bond markets,” said Terry Simonette, president and CEO of NCB Capital Impact. “Most importantly, the instrument created by the CSFP will provide a replicable model for this type of charter school facility financing and lead to increased capacity for the schools, furthering their ability to continue to offer education choices for students living in underserved communities.”

Of the nearly 4,000 charter schools in existence today, less than 100, or 2.5 percent, have access to financing through the rated, tax-exempt marketplace. Preventing access are issues including the tenure of the school, transaction size, aggressive growth plans relying on speculative enrollment and the financial strength and sophistication of the charter school. CSFP will address these challenges by creating greater access to capital, especially for schools in areas with the greatest need for public school choice. 

“Charter schools are one of the fastest-growing sources of school choice in American education today, but many can’t obtain financing for the facilities they need to house their schools,” said Secretary of Education Margaret Spellings. “These grants will help communities open new spaces to charter schools so that, in turn, these schools can open their doors to new students.”

CSFP projects that by using the DOE grant as a reserve, it can provide permanent long-term financing to between 30 and 50 charter schools over the next 48 months at rates 50 to 75 basis points below existing alternatives, thereby saving the schools millions of dollars in the aggregate over the term of the debt. The consortium will focus on lending to charter schools located in school districts with high concentrations of Program Improvement schools under No Child Left Behind and districts serving low-income families.

For more information on the grant program visit http://www.ed.gov/programs/charterfacilities/index.html 

To learn more about NCB Capital Impact, its programs and initiatives in advancing education, affordable housing, health care and long-term care for low- to moderate-income individuals, visit www.ncbcapitalimpact.org.

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NCB Capital Impact, formerly known as NCB Development Corporation, is the non-profit affiliate of NCB. NCB Capital Impact provides financial services and technical assistance to create more affordable cooperative homeownership, assisted living, housing and services for the frail and elderly, and facilities for healthcare centers and charter schools. Headquartered in Washington, D.C., NCB Capital Impact has offices in California and New York.