Credit Enhancement

Two Rivers Public Charter School

School Information: 260 students enrolled in grades Pre-K through 5. Enrollment by 2009 will be approximately 500 students in grades Pre-K
through 8.
Facility: 35,400 square foot building located at 1227 4th Street NE, Washington, DC 20002
Project Cost: $7.5 million, $212/sf
Building Hope Investment: $800,000
Schedule: Purchase completed and school occupied facility in December 2006.

Two Rivers opened in 2004 in a temporary space. The school worked with a developer to design and build a permanent facility that the school then agreed to purchase for $7.5 million. A lender was willing to give the school a loan for $6.7 million without a credit enhancement. America’s Charter agreed to provide an $800,000 credit guaranty for the remaining amount needed to complete the facility. On the basis of this guaranty, the lender agreed to loan the school the full purchase amount. As a result, the school did not have to take out a second, subordinated loan for the remaining amount of the purchase price. This loan would have had a higher interest rate.  Thus, the credit enhancement from America’s Charter allowed the school to save money on the purchase of its permanent facility.