Social bond of the year - corporate: LISC Impact Notes

Annie DonovanThe Local initiative Support Corporation's (LISC) $150 million bond aims to build economic opportunity, support healthy communities and bridge the racial wealth gap in the US.

As a community development financial institution (CDFI), LISC provides financing and technical assistance to low-wealth individuals insufficiently served by conventional financial markets. It was the first CDFI to enter the bond market with a $100 million issue in 2017 and returned last year with this offering to further diversify its capital and provide more flexible and longer duration capital.

"Experienced CDFIs like LISC have increasingly turned to the capital markets as we expand our work to address health, wealth and opportunity gaps that affect millions of people," said Annie Donovan, chief operating officer at LISC. "We are grateful to Environmental Finance for highlighting the importance of these efforts, and the lasting, positive impact that CDFIs can have on families and communities."

The Environmental Finance Bond Awards judges were impressed with the range of impact of the bond. "A highly detailed set of impactful project categories with additional screening criteria ensuring targeted impact adds a layer of uniqueness to the use of proceeds. Project evaluation and selection process are also very strong and support a top score for this category," said one.

Specifically up $10 million of the bond will be set aside for LISC's racial equality programme, Project 10X, which will invest in building equity and wealth for black, indigenous and people of colour (BIPOC) in the US.

"For more than 40 years, LISC has worked to catalyse opportunity for people and communities, especially those long scarred by the impact of discrimination. Project 10X deepens that commitment by getting at some of the systemic underpinnings of racial inequality and investing in ways that make our economy work better for everyone," added Donovan.

Deal Highlights

Issuer: Local Initiatives Support Corporation (LISC)
Size: $150 million
Maturity: 16 November 2021 to 2030, 1 - 10 years
Coupon: Fixed interest rates
Use of Proceeds: Refinance debt, affordable housing, small businesses, healthcare, community safety, schools and jobs
External Review: Vigeo Eiris (V.E), an affiliate of Moody's
Credit rating: S&P (AA-)