Taxable Term Loan
(Consolidated Refinancing of All Outstanding Indebtedness of KIPP Tech Valley Charter School and Albany Community Charter Schools)
Wye River Group served as the KIPP Albany’s Independent Financial Advisor for this transaction.
KIPP Albany Community Public Charter Schools (KIPP Albany) launched on July 1, 2020 as the new partnership between KIPP Tech Valley Charter School (KTV) and Albany Community Charter Schools (ACCS). KIPP Albany is a unified group of schools striving towards excellence in education in the Capital Region of New York.
Post-merger, KIPP Albany now operates four schools (two primary schools and two middle schools) under a single, multi-site charter from SUNY. For the 2020-21 school year, KIPP Albany will serve approximately 1,500 students, employ approximately 230 faculty and staff, have an annual operating budget of approximately $25.5 million, and unrestricted cash and investments of approximately $8.5 million.
Coincident with the merger, KTV and ACCS sought to have all of their respective debt obligations refinanced and consolidated into a single tax-exempt or taxable financing. KTV had four outstanding loans with three different lenders with an aggregate liability of approximately $17.7 million. ACCS had three outstanding loans with three different lenders totaling approximately $9.3 million. Additionally, KTV had two interest rate swaps with a single lender with an aggregate negative market value of approximately $1.4 million.
The financing was structured as a short term taxable loan with M&T Bank. The loan is interest only pending conversion to permanent financing at some point over the next two years. KIPP Albany is currently exploring the feasibility and cost of permanent financing through a single lender or through a public offering of fixed rate bonds. The financing with M&T Bank closed on July 1 coincident with the effective date of the merger of KTV and ACCS.