Public Charter Schools Borrowing With Tax-Exempt Bonds, Second ...

involve some effort on the part of the public charter school personnel to
compile this information, and the school will be responsible for certifying that
the portion of the Official Statement pertaining to it meets the federal securities
law standard of not containing any misstatement of material fact or omitting
to state any material fact necessary to make the statements contained therein,
in light of the circumstances under which made, not misleading. If the Bonds
receive a credit rating, then the rating will be included on the cover of the
Official Statement.
In some cases, the Bonds will be credit enhanced by a letter of credit
or some other mechanism. In that case, there will be an additional contract
between the Borrower and the credit provider, containing additional covenants,
and payment of the Bonds may then depend more on the credit provider
than the Borrower, which may afford an opportunity, in effect, to replace
information in the Official Statement about the public charter school with
information about the credit provider.
32. Each state has a different statutory environment for issuing tax-exempt bonds for public charter schools.
Therefore, bond counsel should be consulted regarding the specific procedures and approvals that may be
applicable to the issuance of tax-exempt bonds for public charter schools in your state.
33. Under certain circumstances, a tax-exempt loan also may be made to a nonprofit corporation that is
affiliated with or controlled by the public charter school, or to a special purpose entity such as a limited
liability company (that is disregarded for tax purposes) created to own the financed facility.
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