Pacific Collegiate School

Refinancing for Stability and Long-Term Savings

Pacific Collegiate School is a high-performing public charter school serving students in grades 7–12 in Santa Cruz County. Consistently ranked among the top schools in California and the nation, Pacific Collegiate operates with the support of the Pacific Collegiate Foundation (PCF), which owns and leases the campus to the school.

As the school continued to invest in its facilities and long-term growth, it faced rising costs tied to an existing variable-rate debt structure. In response, Pacific Collegiate partnered with Weist Law and CalMuni Advisors to refinance its debt—ultimately securing a more stable, cost-effective financing solution that better aligned with its long-term financial goals.

The Financial Challenge

Pacific Collegiate faced the need to refinance approximately $7 million in outstanding variable rate demand revenue bonds that had originally funded campus improvements.

These bonds were backed by a letter of credit (LOC), which was approaching renewal. However, during the 2023 banking disruption, the cost of maintaining that LOC increased significantly. As a result, the existing financing structure became increasingly expensive and unpredictable, placing pressure on the school’s operating budget.

The goal was to secure a more stable, cost-effective solution that would reduce annual costs and improve long-term financial flexibility.

The Refinancing Approach

Pacific Collegiate engaged Weist Law and CalMuni Advisors to develop and execute a refinancing strategy tailored to its needs.

This process involved a detailed evaluation of the school’s financial position and financing options. The team conducted due diligence, prepared financing scenarios, and developed projections to identify the most effective path forward.

At the same time, key elements of the transaction were coordinated, including identifying a trustee, working with a joint powers authority to serve as issuer, and structuring the financing in a way that aligned with the school’s long-term goals.

Execution and Financing Structure

Following a competitive process that included multiple financial institutions, Santa Cruz County Bank was selected as the purchaser of the refunding bonds.

The final structure delivered a fixed interest rate of 4.47%, replacing the prior variable-rate debt and eliminating the need for a letter of credit. The financing also included flexible terms, such as immediate optional prepayment and a reduced debt service coverage requirement.

Results and Impact

The refinancing produced meaningful results for both Pacific Collegiate and PCF.

Moving to a fixed interest rate created immediate budget stability and removed exposure to future market fluctuations. Annual debt service payments were reduced from approximately $460,000 to $357,000, generating ongoing savings.

Eliminating the letter of credit removed a major cost driver, while lower reserve requirements and improved covenant flexibility provided additional financial breathing room and operational flexibility.

Leadership and Long-Term Positioning

Pacific Collegiate’s leadership played a key role in the success of this effort. The board and management team demonstrated a strong commitment to long-term planning, disciplined financial management, and thoughtful decision-making.

This approach ensured the refinancing was not just a short-term fix, but part of a broader strategy to strengthen the school’s financial position over time.

Weist Law’s Role

Weist Law worked alongside Pacific Collegiate and PCF throughout the process, helping guide the strategy, coordinate the transaction, and deliver a successful outcome.

The engagement reflected a collaborative, hands-on approach—serving as an extension of the client’s team and focusing on practical solutions that support long-term success.