ImpactAlpha, Nov. 16 – The notes from Local Initiatives Support Corp. are the latest example of the public market’s appetite for debt from community development financial institutions, or CDFIs.
The S&P ‘AA-’ rated LISC Impact Notes notes will be issued monthly to retail and institutional investors in denominations as low as $1,000. The proceeds will support LISC’s work in affordable housing, small businesses, health care, and other community investment. The notes are similar to those issued by Capital Impact Partners, an Arlington, Va.-based CDFI, which have raised more than $160 million since 2017. LISC issued a $100 million institutional bond the same year.
“The field of community development might be relatively new to the capital markets, but it is not new to meeting investor expectations for performance,” said LISC’s Maurice Jones. Diversification.
The public markets offer a way for larger CDFIs to diversify their sources of capital and tap growing investor interest in social impact. Another impetus: A key bank regulator in June finalized Community Reinvestment Act rules that could reduce incentives for banks to finance community development. LISC, with a 40-year track record, has been on a fundraising tear, attracting investment from Kaiser Permanente, Netflix, MacKenzie Scott and others
The public markets offer a way for CDFIs large enough to absorb the costs to diversify their capital sources and tap into a growing investor interest in social impact. Another impetus: A key bank regulator in June finalized a Community Reinvestment Act rule that could reduce incentives for banks to finance community development.
LISC’s 40-year track record has attracted support in recent months from organizations ranging from Kaiser Permanente to Netflix.
LISC’s Impact Notes align with the Social Bond Principles and United Nations Sustainable Development Goals, as verified by global rating and research firm Vigeo Eiris.