U.S. Bank, Enterprise Community Partners announce innovative racial equity bond
July 14 2021 - 9:00AM
Business Wire
The $30 million bond will support housing
developers of color
U.S. Bank and Enterprise Community Partners (Enterprise) today
announced the issuance of an innovative bond designed for targeted
and measurable racial equity results. Issued by Enterprise
Community Loan Fund, Enterprise’s Community Development Financial
Institution (CDFI), the $30 million bond will help provide loans to
Black, Indigenous and people of color housing developers under
Enterprise’s Equitable Path Forward initiative.
This is the first CDFI-issued racial equity bond. The
designation of this social bond as a racial equity bond provides
for targeted investments in underserved communities of color. CDFIs
have rigorous standards about eligibility and reporting when it
comes to how funds are used, and this bond will require additional
project-level vendor requirements and thorough impact reporting
data for investors. The introduction of this new social bond
framework into the capital markets for mission-driven institutions
like CDFIs offers companies the opportunity to directly invest in
projects that support racial equity in underinvested communities of
color.
“It is time to take decisive action to ensure the businesses
that create affordable homes are more representative of the people
who live in them,” said Lori Chatman, president of Enterprise
Community Loan Fund. “Through Equitable Path Forward, our
partnership with U.S. Bank will enable Enterprise to support
talented developers across the country who have the skills and
experience to create positive change in their communities.”
To achieve its impact goals, Enterprise will use the bond
proceeds to finance loan capital to people of color-led
community-based nonprofit organizations and mission-aligned
for-profit developers. These loans are primarily for multi-family
housing and community facilities. The loans themselves will vary in
both type and stage of project development, including acquisition,
construction, mini-perm, permanent and predevelopment.
U.S. Bank served as structuring agent, advisor and
sustainability coordinator on the design of this unique framework.
The company, which announced its long-term U.S. Bank Access
Commitment earlier this year, is purchasing the initial $10 million
of this $30 million bond. This structure provides more flexibility
for Enterprise’s strategy to match its future Equitable Path
Forward funding needs.
“We see tremendous opportunity for positive social impact with
racial equity bonds, especially with this type of innovative
framework. This structure allows an investor to see, down to
project-level details, how their investment is advancing racial
equity,” said Marcus Martin, managing director and head of ESG,
Fixed Income and Capital Markets at U.S. Bank. “We expect this
transaction will inspire other organizations – including
corporations, municipalities, not-for-profits and more CDFIs – to
issue similar bonds that address critical social challenges and
deliver the most robust results for all stakeholders involved.”
“U.S. Bank is a strong supporter of CDFIs, which play an
incredibly important role in financing entrepreneurs and small
businesses that traditionally have been left out or underserved
because of systemic inequities,” said Zack Boyers, president and
CEO of U.S. Bancorp Community Development Corporation, the tax
credit and community development subsidiary of U.S. Bank. “We’ve
helped ensure more than $450 million in capital was available to
CDFIs and their customers – the majority of that just in the last
four years – and we look forward to continued collaboration to help
build thriving communities.”
About Enterprise Community Partners
Enterprise is a national nonprofit on a mission to make home and
community places of pride, power and belonging for all. To make
that possible, we operate the only organization designed to address
America's affordable housing crisis from every angle: we develop
and deploy programs and support community organizations on the
ground; we advocate for policy on a nonpartisan basis at every
level of government; we invest capital to build and preserve rental
homes people can afford; and we own, operate and provide resident
services for affordable communities. All so that people not only
make rent, they build futures. With this end-to-end approach, 40
years of experience and thousands of local partners, Enterprise has
built and preserved 793,000 homes, invested $61 billion in
communities and changed millions of lives. Join us at
EnterpriseCommunity.org.
About U.S. Bank
U.S. Bancorp, with nearly 70,000 employees and $553 billion in
assets as of March 31, 2021, is the parent company of U.S. Bank
National Association. The Minneapolis-based company serves millions
of customers locally, nationally and globally through a diversified
mix of businesses: Consumer and Business Banking; Payment Services;
Corporate & Commercial Banking; and Wealth Management and
Investment Services. The company has been recognized for its
approach to digital innovation, social responsibility, and customer
service, including being named one of the 2021 World’s Most Ethical
Companies and Fortune’s most admired superregional bank. Learn more
at usbank.com/about.
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version on businesswire.com: https://www.businesswire.com/news/home/20210714005531/en/
Todd Deutsch, U.S. Bank Public Affairs & Communications
todd.deutsch@usbank.com | 612-303-4148
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