Palm Bay Academy became the latest Florida charter school to default on bonds, with the school agreeing to pay 77 cents on the dollar to holders of its senior lien revenue bonds. The default, confirmed July 16, 2026, follows years of financial strain that began in September 2020 when the bonds first became impaired. The school’s bond trustee, UMB Bank, N.A., reported that holders of the Series 2017A bonds will receive 77 cents on the dollar for unpaid principal and 10 cents on unpaid interest, while holders of subordinate bonds—Series 2017C, D, E, and F—will get nothing. Bondholders agreed to sell their stake in the school to generate cash for the payoff. The academy had $14.8 million in outstanding bonds before the default deal. Matt Fabian, president of MMA, said the bonds were issued unrated and first showed signs of distress in 2020. The school’s financial troubles accelerated as higher interest rates made refinancing difficult, according to Dora Lee, a partner at Belle Haven Investments and director of Muni Research. She said credit pressures in the charter school sector are likely to increase defaults. “The higher interest rate environment is making it harder to find refinancing options that will make their debt load more sustainable,” Lee said. The bond trustee noted that nearly all bondholders had worked with the school and trustee for months to support its operations. Despite these efforts, the school failed to meet required cash reserves under its loan agreement, leading to ongoing defaults. The trustee’s statement on the MSRB’s EMMA website detailed the school’s inability to meet financial obligations. The default adds to growing concerns about Florida’s charter school funding model. With rising interest rates and declining enrollment in some districts, experts warn more schools could face similar crises. The deal for Series 2017A bonds is expected to provide temporary relief but does not resolve the broader financial instability affecting the academy.