A $3.1 million bond deal will rehabilitate Rhode Island charter school

BY SourceMedia | CORPORATE | 11/29/22 04:25 PM EST By Thomas Nocera

The Rhode Island Health and Educational Building Corporation has sold $3.1 million of bonds on behalf of the Paul Cuffee School, a Providence-based, kindergarten through 12th-grade public charter school.

"RIHEBC's mission is to help Rhode Island's health and educational institutions meet their facilities needs, and that's exactly what this $3.1 million bond issue will do," said Kim Mooers, Executive Director of RIHEBC, in a statement announcing the deal.

The 20-year bonds, backed by the school's general revenue, carry a 4.43% interest rate and were sold via private negotiations to Bank Rhode Island on Nov. 15 according to RIHEBC officials, marking the most recent issuance of state-backed debt in support of a major capital plan that's bankrolling brick-and-mortar repairs to education infrastructure statewide.

School officials said they'll use the funds to accelerate repairs the school's recently purchased high school building, which is in need of a new roof, and retrofitting of some mechanical hardware and climate control systems.

"We waited many years to acquire the upper school and, having completed this acquisition, this bond allows us to do the necessary upgrades immediately," said Chris Haskins, head of school, in a statement, adding the bonds will "help us meet our facilities goals and our mission of meeting the individual needs of Providence's diverse students through a maritime-themed curriculum that promotes social and civic skill-building, and outstanding academic learning."

Thus far, RIHEBC has issued over $2.5 billion through a public school construction bond program in addition to special obligation bond deals for issuers like the Cuffee school.

On Nov. 8, Rhode Island voters approved ballot measures that secured an additional $250 million of state bonds for K-12 schools, as well as $100 million to upgrade the state university's oceanographic research and education programs.

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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