Bonds

Elite private elementary school in Los Angeles bonds to expand campus

An elite private school catering to Los Angeles’ wealthiest residents is tapping the municipal bond market as it looks to expand its campus and add to its academic offerings. 

Curtis School is seeking to raise $24.3 million in revenue bonds through the California Enterprise Development Authority in a sale pricing Wednesday.

The exclusive elementary school plans to use proceeds from the sale to construct the Collaborative Learning and Innovation Center, a 21,000-square-foot, three-level learning space equipped with an engineering lab, a dedicated robotics space, science classrooms and an art studio.

Stifel is underwriting the California Enterprise Development Authority deal for the Curtis School.

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The sale comes amid growing demand for admission to elite institutions from parents who want their kids to receive an exclusive education along with the social and professional network that comes with it. 

“On the whole, independent schools have historically benefitted from flexibility in funding options, and private placement bonds have been a popular form of financing for this sector,” said Chase Ashworth, associate director at S&P Global Ratings. “However, we have seen an increase in independent schools pursuing public market bonds recently, following pressures in the banking sector this past year and as banks have tightened under current economic conditions.”

The number of applicants to Curtis, per bond documents, has risen over 21% since the 2018-2019 school year while enrollment has remained relatively stable over the same period of time. However, proceeds from the bond issue aren’t intended to be allocated toward increasing the number of students it educates; the school says it’s operating at optimal enrollment. 

“To bring in wealthy parents, schools want to provide whatever the amenity du jour is, whether it’s a climbing wall, a Maker’s Lab or an Arabic language program,” said Emily Glickman, founder of Abacus Guide Educational Consulting. “Long gone are the days of the spartan private school, where students took cold showers and toughed things out.”

Curtis charged $36,124 for admission during the 2022-2023 school year and enrolled 492 students for the current school year. The school’s student-teacher ratio is 16:1 for pupils in grades 3 through 6, and it’s as low as 8:1 for students in its developmental kindergarten program. 

Founded in 1925, the elite private school has alumni including Brooklyn Beckham, son of David and Victoria Beckham, and Rob Friedman, former co-chairman of Lionsgate Motion Picture Group, serves on the board of trustees. It also acts as a feeder to elite Southern California prep schools like Harvard Westlake School and Brentwood School. 

Investor demand for the bonds is expected to be strong, according to Dora Lee, director of research at Belle Haven Investments. 

“Not only will the usual buyers of California bonds be there but alumni have also been known to show their support for their alma maters by buying bonds as well,” said Lee. “There’s a lot of overlap between the buyer base and alumni.” 

The 2024 bonds carry an A rating from S&P. The sale is being managed by Stifel. 

A representative for Curtis School didn’t respond to a phone call requesting comment. 

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