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Reinvestment Fund Issues $50 Million in Impact Investment Bonds

Oversubscribed, CDFI Bond Demand Affirms Interest in Socially Responsible Outcome at Competitive Market Rate

Reinvestment Fund, an S&P AA rated Community Development Financial Institution (CDFI), today announced the pricing of $50 million in general obligation bonds. Reinvestment Fund is one of the first CDFIs to access the capital markets and their bonds were oversubscribed, confirming a significant demand among institutional investors for the unique impact investing opportunities their CDFI provides low-income communities across the country.

"The CDFI industry was founded on the faith, trust and patience of a unique class of American investor. These forerunners to impact investors accepted an unconventional and illiquid investment vehicle for many years in the pursuit of a socially responsible outcome for themselves and underinvested communities," said Donald Hinkle-Brown, President and CEO, in making the announcement. "Reinvestment Fund demonstrates that community impact and market yields are not incompatible, and the market understands and appreciates this. By bridging to the capital markets, we are able to provide investments that are safe, appropriately risk priced, and at a greater scale."

Reinvestment Fund manages $1 billion in capital for financing from more than 850 investors that include individual investors, banks, government entities, private foundations, and faith-based and community organizations. Proceeds from Reinvestment Fund’s Impact Investment bonds will support small businesses, grocery stores, and childcare centers in struggling communities, helping to bring much needed jobs and boost local economic growth. That impact is multiplied by the work of the hundreds of other CDFIs across the nation. The bonds add to Reinvestment Fund’s toolkit of products designed to build wealth and opportunity for low-income places and people.

"In promoting public-private partnerships, CDFIs make government dollars go further by super-charging private investment in struggling cities and communities across America," commented Mark Zandi, Reinvestment Fund’s Board Vice-Chair, and Chief Economist, Moody’s Analytics. "CDFIs have enjoyed broad bipartisan support for decades. Now, by finding new sources of private capital, CDFIs are able to amplify their impact. The model is a proven success and will only increase reach as private money empowers CDFI investment to go further."

While institutional capital from insurers, pension funds, Donor Advised Funds and mutual funds are the newest entrants to impact investing, they bring with them institutional expectations about credit strength and market conformity. Reinvestment Fund’s rating and market capital experience address these expectations and create new opportunities for institutional investors.

"Reinvestment Fund exemplifies the power of the CDFI model for government and philanthropic partnership," commented Debra Schwartz, Managing Director, Impact Investments, MacArthur Foundation. "As a Foundation that has supported Reinvestment Fund, and many other CDFIs, we are thrilled that they are able to grow their capacity and reach by accessing this highly efficient source of private capital. This is a game changer that connects impact investing to the traditional capital markets."

Next Finance , May 2017

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