IRVINE, Calif.--(BUSINESS WIRE)--The Change Company, America’s Community Development Financial Institution (CDFI), announced today the closing of a private placement (the “Offering”) of $150 million aggregate principal amount of its 5.375% Senior Notes due in 2031 (the “Notes”). Investors in the Notes include over 45 socially responsible insurance companies, asset managers, and banks seeking to participate in impactful ESG investment opportunities that provide access to capital in support of homeownership for Black, Latino and low-income borrowers and communities. The Change Company and its affiliates have successfully raised approximately $250 million in new capital over past six months in support of their community development mission.
In 2020, The Change Company originated approximately 20,000 home loans totaling more than $7 billion – approximately 70% of which were to Black, Latino, and other underbanked borrowers. The average home loan to underbanked borrowers was for approximately $320,000, with an interest rate of 3.22%, and a loan-to-value of 76%.
Steven Sugarman, Founder of The Change Company, added, “This $150 million offering of senior debt is milestone for all CDFIs – demonstrating that, at long last, CDFIs are able to attract the capital and liquidity necessary to increase social and racial equity in home ownership in America. We are humbled by the strong, diverse consortium of socially responsible investors who participated in this offering. The Change Company will continue to expand its partnerships to reach more underbanked borrowers in more underserved markets across the United States.”
The Change Company will use net proceeds from the Offering, among other things, to fund its three previously announced initiatives to increase Black Homeownership, Latino Homeownership, and Homeownership in Low Income Communities by $1 billion each. The Change Company expects to grow its lending to over $10 billion in 2021 to further its community development mission of lending to the underbanked.
Rev. Everett Bell, Chair of The Change Company’s Community Advisory Board, stated, “We are honored that our platform continues to serve as an effective conduit for socially responsible investors to increase access to capital for minority and low-to-moderate income communities often left behind by traditional financial institutions. This additional capital will continue to strengthen our mission to address the needs of Black, Latino, low-income and historically underserved communities across the country. We thank our new partners for their participation in our commitment to bringing greater social and racial equity to homeownership.”
The Notes, which received an investment grade A- rating from Egan Jones, bear a fixed interest rate of 5.375% and a no-call feature during its first five years. Thereafter, the interest rate will vary each quarter based on a 4.64% spread over the three-month SOFR index (subject to a floor of 5.25%).
Performance Trust Capital Partners served as exclusive financial advisor to The Change Company and sole placement agent in the Offering. Gaynor Law Group, P.C. and Michelman & Robinson, LLP served as The Change Company’s legal counsel in the Offering. Windels Marx Lane & Mittendorf, LLP served as legal counsel to Performance Trust.
About The Change Company
The Change Company empowers homeowners, small businesses, and consumers to pursue their American dreams by bringing social and racial equity to banking and lending. The Change Company’s team has built businesses that have lent over $50 billion to over 250,000 borrowers and provided financial services to over two million Americans.
For more information, visit us at http://www.ChangeLLC.com/.
No Offer or Solicitation
This press release does not constitute an offer to sell, a solicitation of an offer to sell or the solicitation of an offer to buy any securities. There will be no sale of securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The Notes were offered and sold only to accredited investors and to qualified institutional buyers. The Notes have not been and will not be registered under the Securities Act or the securities laws of any other jurisdiction. Unless they are registered, the Notes may be offered and resold only in transactions that are exempt from registration under the Securities Act and applicable state securities laws.
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