Imagine School Land O'Lakes downgraded to B3 by Moody's

Imagine School Land O'Lakes was downgraded to B3 from B2 by Moody's Ratings, which cited enrollment and revenue concerns, with debt service coverage possibly falling below one time coverage this fiscal year.

Moody's outlook is negative on the Florida school's rating.

The downgrade stems from delays to opening a Trinity campus of the school, the rating agency said. Originally expected to open August 2024, the school now hopes to open the campus mid-academic year.

The school's budget depends on mid-year enrollment growth associated with the campus opening and Moody's said that bump isn't likely this school year.

The school is unlikely to have sufficient debt service coverage in fiscal 2026, Moody's said, and may need a waiver to avoid a bond default.

The charter school is part of a larger network of Imagine Schools nationwide and its fiscal 2026 operations are based on a partial waiver of management fee payments and a short-term loan.

The school currently has 46 days' cash on hand.

The school, which serves students from kindergarten through grade 8, has a strong academic reputation, solid enrollment trends and student demand, Moody's said.

The charter school had $46 million in debt as of the end of fiscal 2025, including parity debt for the Imagine School at Trinity project.

The charter school is not rated by S&P Global Ratings. It couldn't be immediately determined if it is rated by Fitch Ratings or KBRA.

The principal of Imagine School Land O'Lakes didn't immediately respond to a request for a comment.

Destin High School, another charter school in Florida, defaulted on $20.4 million of bonds in September.

According to Municipal Market Analytics Default Trends' October 30 issue, there have been more charter school defaults this calendar year than in any other municipal bond sector.