Impact Bond Affirms Demand for Socially Responsible Investments at Competitive Market Rate
Philadelphia, PA, October 3, 2018—Reinvestment Fund, an S&P rated Community Development Financial Institution (CDFI), today announced the close of $75.7 million in general obligation bonds. Reinvestment Fund was one of the first CDFIs to access the capital markets in 2017 and this marks their second issuance.
The issuance signals a growing market among institutional investors for the unique impact investing opportunities CDFIs provide low-income communities across the country. There are currently six S&P rated CDFIs in the country, three of which have raised over $300 million in bond issuances over the last year. Reinvestment Fund’s approach to connecting the public markets to community development earned it the Global Impact Asset Manager of the Year award from the Global Social Impact Investment Steering Group (GSG), an independent umbrella organization for nations working to catalyze impact investment and entrepreneurship to benefit people and the planet.
“We are pleased to be participating in the transformation of the socially responsible lending industry. Once a select, private investment, the issuance of multiple bonds since 2017, has catapulted CDFIs into a new category creating access and strengthening impact. The demand for socially responsible outcomes for underinvested communities is strong and unwavering,” said Donald Hinkle-Brown, President and CEO, in making the announcement.
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 AA- rating and market capital experience address these expectations and create trusted opportunities for institutional investors. Reinvestment Fund’s Impact Bond issuance saw the return of two significant investors, TIAA, the leading provider of financial services in the academic, research, medical, cultural and government fields as well as QBE, one of the world’s top 20 general insurance and reinsurance companies.
“As a leader in responsible investing, we are committed to seeking out opportunities that affect social change and amplify impact,” said Stephen M. Liberatore, CFA, manager of the TIAA-CREF Social Choice Bond Fund and several other ESG fixed income strategies at TIAA Investments, an affiliate of Nuveen. “The Reinvestment Fund bonds offer the opportunity to invest in a diverse portfolio that connects our clients’ desires, not only to achieve competitive returns, but to have a demonstrable and positive impact, such as generating new jobs and improving access to fresh, healthy food in struggling communities.”
“At QBE, we are committed to investing in the wellbeing and sustainability of the communities where we operate through our Premiums for Good program,” said Gary Brader, Chief Investment Officer at QBE. “We have come to know Reinvestment Fund’s work through collaboration in Pay for Success transactions in the United States. With this investment, we are excited to support their impact investment work more broadly.”
With its first GO Bond issuance, Reinvestment Fund was able to support over a dozen high impact projects in struggling communities across the country, including grocery stores, health centers and mixed-use projects that are repurposing blighted properties. The impact was felt across the nation from Los Angeles to New Orleans to Philadelphia. “Reinvestment Fund enabled us to create a hub for the arts, education and entrepreneurship at the Rose Collaborative campus in New Orleans’ 7th Ward –transforming a long-vacant historic church and its adjacent former school buildings into a renewed community asset and economic development engine,” commented Jonathan Leit, Director, Alembic Community Development which developed the project with Rose Community Development Corporation.
Reinvestment Fund manages $1 billion in capital for financing from more than 865 investors that include individual investors, banks, government entities, private foundations, and faith-based and community organizations. Proceeds from Reinvestment Fund’s new Impact bonds will continue to support projects in struggling communities, helping to bring much needed jobs and boost local economic growth.
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About Reinvestment Fund
Reinvestment Fund is a catalyst for change in low-income communities. The organization integrates data, policy and strategic investments to improve the quality of life in low-income neighborhoods. Using analytical and financial tools, Reinvestment Fund brings high-quality grocery stores, affordable housing, schools and health centers to the communities that need better access—creating anchors that attract investment over the long term and help families lead healthier, more productive lives.