The Low Income Investment Fund, a San Francisco-based community development financial institution (CDFI), has announced the closing of its first public debt offering.
The $100 million Sustainability Bond offering, which included $25 million in seven-year and $75 million in ten-year bonds and received more than $1 billion in orders from institutional investors, will be used to finance community development efforts across the United States. Proceeds from the issue will enable LIIF to provide mission-driven developers and nonprofits with lower-cost and longer-term capital, which in turn will boost their capacity to provide much-needed services in their communities.
Projects to be funded include affordable housing in Washington, D.C., neighborhoods at risk of gentrification; nonprofit arts spaces in San Francisco's Mission District, which is ground zero for the city's displacement crisis; a Federally Qualified Health Center in New Orleans that provides critical health services and programming in the community; and a mixed-use development in the South Bronx that provides much-needed access to a full-service grocery store, health center, and retail.
The first CDFI bond to be directly aligned with the United Nations' Sustainable Development Goals was issued under LIIF's Sustainability Bond Framework, which supports investments in projects that link environmental sustainability and social impact.
"ESG [environmental, social, and corporate governance] considerations are increasingly top of mind for investors today, and sustainability bonds can be beneficial instruments for issuers interested in simultaneously raising capital and positively contributing to important environmental and social causes," said Heather Lang, executive director of Sustainalytics' Sustainable Finance Solutions team, which validated the framework. "Sustainalytics believes that the Low Income Investment Fund's Sustainability Bond is credible and impactful and aligned with its mission as a community development financial institution. LIIF is uniquely positioned to allocate capital to low-income communities and has also notably opted to incorporate environmental factors into its framework."