In just six years, the charter school impact fund is now borrowing at rates on par with school districts, bringing equity within reach for all high-quality K-12 schools.
NEW YORK, Oct. 31, 2024 /PRNewswire/ — Equitable School Revolving Fund (ESRF) announced that it has closed its latest raise of over $350 million of A-rated “Social Bonds” to support its mission to provide access to affordable facilities to high-performing, high-impact public charter schools across the U.S.
In its most successful bond deal to date, ESRF received approximately $4.5 billion in orders from 67 new and repeat investors, larger than the size of the entire annual charter school bond market. Notably, ESRF achieved terms comparable to many traditional school districts for the first time, finally placing public charter schools, particularly those that serve low-income students and students of color, on equal financial footing.
The funds will enable ESRF’s program administrator, Equitable Facilities Fund (EFF), to expand its portfolio of school borrowers. Since its launch in 2017, EFF has provided over $1.4 billion in financing to support 200 school campuses across 22 states and the District of Columbia, impacting more than 100,000 students, 75% of whom are considered low-income and 88% are students of color.
“When we launched EFF, our theory of change was to put public charter schools on an equitable footing with district schools,” said EFF CEO Anand Kesavan. “With this latest issuance, that market shift has been achieved. Quality schools save millions with the best financial product, period. Investors get access to the best high-impact schools at scale to invest in the most valuable product – our children’s futures.”
On October 4, 2024, S&P Global Ratings also reaffirmed ESRF’s ‘A’ rating and positive outlook, citing the fund’s “strong operating performance during the program’s five-year history of no delinquent payments or defaults.”
Siebert Williams Shank, the nation’s largest minority and woman-owned underwriter, was the lead manager on the deal. “Siebert Williams Shank was highly pleased with the investor reception for the ESRF bond sale,” said Managing Director, David Stinfil. “The depth and breadth of interest from investors is stating loud and clear that they want ESRF to continue to grow, and the tightness of the pricing spreads firmly establishes ESRF as a leading guarantor nationwide of charter school debt, rivaling the spreads of many of the competing state-guarantee funds.”
“Investing in ESRF allows Wilmington Trust to increase our exposure to the charter school industry while still getting the protection of the diversification and philanthropic equity cushion provided by ESRF’s deep pooled over-collateralization level,” said Ted Molin, Vice President and Senior Research Analyst at Wilmington Trust Investment Advisors, Inc. “ESRF’s loan origination standards, portfolio monitoring framework and focus on academic standards as a key credit metric create a compelling investment opportunity for our clients.”
As EFF continues to expand its national lending platform, it has also launched several state and region-specific revolving loan funds in Texas, Nevada and Arkansas, with plans to launch in Washington, D.C., New York and Tennessee. It also recently announced the launch of the Catapult Fund in partnership with the Charter Schools Development Corporation, a groundbreaking new loan fund designed to offer flexible, affordable financing to high-impact, early-stage public charter schools.
About Equitable Facilities Fund
Equitable Facilities Fund is a 501(c)(3) nonprofit social impact fund created to provide long-term, low-cost facility loans that allow high-performing public charter schools to maximize the resources they dedicate to students. High-quality public charter schools promote bright futures for children across America, and EFF believes these schools should borrow under terms comparable to traditional public school districts. EFF administers an ‘A’ rated revolving loan fund, which recapitalizes using funds from Equitable School Revolving Fund’s bond issuances, to offer high-credit, long-term, scalable bond investment opportunities. To learn more, visit www.eqfund.org or email [email protected].
SOURCE Equitable Facilities Fund
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