LISC, a large, national non-profit and a Community Development Financial Institution (CDFI) is tapping the bond market to raise $100 million in capital, a first of its kind, “game-changing” public investment.
Why This Matters – U.S. Budget Threat
As covered earlier this week, sixty days into the new administration, perhaps the most noteworthy development last month was the proposed US budget threat to eliminate the CDFI and NMTC programs.
These programs are crucial to the support of low-income communities through a tax credit for private lenders if they invest in underserved areas. Discontinuing CDFI and NMTC will be seriously short-sighted and damaging.
Invest Impactly advocated for the permanence of NMTC in December last year, arguing the clear impact it has demonstrated to ordinary working Americans and communities, such as those showcased by US Representative Pat Tiberi in Ohio.
CDFI’s Net-Positive Impact
Community Development Financial Institution funds or CDFIs have grown in activity and popularity in the past 20 years and have turned small amounts of capital into billions of dollars of economic activity.
In 2016, after the US Congress devoted just $233 million to the CDFI Fund, $2.1 billion in loans and investments created 28,000 jobs in poor communities.
So it is noteworthy to receive news that the Local Initiatives Support Corp or LISC, a national nonprofit and one of the nation’s largest community development intermediaries, is announcing a $100 million bond issuance to help drive investment capital into distressed urban and rural communities across the U.S.
The offering is said to be the first time a CDFI is tapping the bond market for capital, a large market that last year stood at $39.3 trillion. Morgan Stanley will underwrite LISC’s planned financing.
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“Impact investors are looking for proven ways to help revitalize communities and restore economic mobility for people fighting to compete in the current economy,” said Maurice Jones (photo), LISC president and CEO. “LISC has been leading that work for decades, building a track record that improves the quality of life for people all across the country.”
The move is even more notable coming at a time when Community Development Block Grants and other federal community development programs are proposed for drastic cuts or elimination by the Trump administration.
“It has never been more important for us to invest in local economies so families can raise their standards of living,” stressed Jones. “This new capital will not only help us fuel businesses, jobs and large-scale redevelopment efforts, but also help address the persistent social and economic challenges preventing people from maximizing economic opportunities.”
The bond offering received a ‘AA’ rating from Standard & Poor’s.”
Source: LISC, Housing Finance
