News Story

New York, May 14, 2021 -- Moody's Investors Service has assigned a Aaa enhanced rating to International Leadership of Texas' approximately $47 million Education Revenue Bonds, Series 2021. The bonds are issued through the Clifton Higher Education Finance Corporation on behalf of the charter network.

For additional information regarding the underlying rating, please see our press release dated January 07, 2021. Moody's maintains a Baa3 underlying rating with a stable outlook on the charter school.

RATINGS RATIONALE

The Aaa enhanced rating is based on the rating of the Texas Permanent School Fund and the structure and legal protections of the transaction which provide for timely payment by the PSF if necessary. The Texas Permanent School Fund is rated Aaa and has a stable outlook.

FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING

- Not applicable

FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING

- Significant weakening of credit quality of Texas school districts and/or increase in charter school guaranteed debt beyond current expectations

- Unanticipated expansion of guarantee program and/or sharp decline in fund asset value resulting in substantial increase in ratio of guaranteed bonds to available fund assets

- Constitutional amendments permitting greater distribution of fund assets for non-guarantee purposes

- Growing economic, financial and/or leverage weakness at the state level

LEGAL SECURITY

Texas school district and charter district bonds approved under the program will be absolutely and unconditionally guaranteed by the corpus of the Permanent School Fund of the State of Texas. In the event of a payment default by a school district, registered owners will receive all payments due from the corpus of the Permanent School Fund.

USE OF PROCEEDS

Bond proceeds will be used to finance various expansion projects as well as an administrative facility.

PROFILE

International Leadership of Texas is a K-12 charter school organization that operates 33 schools on 20 campuses located in the Dallas/Fort Worth and Houston/College Station metropolitan areas. The organization has experienced rapid growth and currently serves 20,856 students. The schools operate under a single charter that expires in 2028.

METHODOLOGY

The principal methodology used in this rating was Rating Transactions Based on the Credit Substitution Approach: Letter of Credit-backed, Insured and Guaranteed Debts published in May 2017 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1068154. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.

For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at http://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1263068.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

Alexander Rawlings
Lead Analyst
REGIONAL_SOUTHWEST
Moody's Investors Service, Inc.
Plaza Of The Americas
600 North Pearl St. Suite 2165
Dallas 75201
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

John Nichols
Additional Contact
PFG Admin
JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653

Releasing Office:
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JOURNALISTS: 1 212 553 0376
Client Service: 1 212 553 1653