community reinvestment fund, usa. access to capital provides economic opportunity bringing scale and...
TRANSCRIPT
Community Reinvestment Fund, USA
Access to Capital Provides Economic Opportunity
Bringing Scale and Sustainability to Community Development Finance
Federal Reserve Bank of Boston
November 4, 2005
Presented by: Frank Altman
President and CEO
What is CRF?
A national non-profit financial services organization based in Minneapolis, MN
Provides capital to communities by purchasing economic development and affordable housing loans from community development lenders
Helped establish New Markets Tax Credit as a member of the NMTC Coalition
CRF’s Mission
To transform the community development finance system by accessing capital markets on behalf of local development lenders to enable them to increase their impact on the lives of people and communities.
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We Work in Two Distinct Markets
“We talk to the Birkenstocks and to the Wing Tips.”
Track Record
$457 million provided to 114 lending partners in 25 states, District of Columbia.
More than 1,600 loans in 39 states.
10,594 total jobs, created/retained, 2,164 of which were provided to minorities or women.
8,733 total housing units. Loss ratio is less than 0.5% Delinquencies currently 0.39%
INVESTORS INCLUDE:
Prudential MetLife and MetLife BankNorthwestern MutualAxa-EquitableDomini Social InvestmentsCalvert Social Investment FundCRA Fund AdvisorsGeneral Board of Pensions and Health Benefits of the United Methodist ChurchF.B. Heron FoundationMennonite Mutual Aid Society Insurance Co.U.S. BankWells FargoWashington MutualState Farm BankCitibankMacArthur FoundationFannie Mae Foundation…and many others.
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7Location of Lending Partners
8Location of Borrowers
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Sustained Investment Yields High ImpactLake Street Corridor, Minneapolis
Two Strategies for Raising Capital
Securitization New Markets Tax Credit
How CRF Leverages Funds
80% market-rate investments
18% social-rateinvestments
2% charitable contributions
Community Development Finance Milestones Reached by CRF
$130 million in Rated Debt Securities Affordable Housing Debt Offering - $84 million
total offering, S&P ‘AAA’ rating for $63.5 million. CRF 17 – First rated economic development debt
offering, $46.1 million total, ($26 million AAA, $7 million A, $6 million BB), 17% subordinated capital (versus 23% in CRF 16).
New Markets Tax Credits $412.5 million New Markets Tax Credit allocation
for Business Loans in Low-Income Communities.
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Details on CRF USA’sRecent Rated Economic
Development Security
$46.1 million total security•$26.1 million in Class A Notes
Rated by Standard & Poor’s Privately Placed
Rated Tranches from “AAA” to “BB”
Community Reinvestment FundBecomes More Complex
Community
Reinvestment Fund
National New Markets
Tax Credit Fund Inc.
Business Loan
Conduit LLC
Commercial
Lending LLC
Sub-allocates to
and Controls
Makes loans to
Sponsor of
Local CDE
Qualified
Business
Qualified
Business
Makes loans to
Purchases loans from
Local CDE
Qualified
Business
Qualified
Business
Makes loans to
Purchases loans from
Challenges
•CRF’s ability to grow limited by capital constraint
•Develop a larger market for the unrated, supporting class of Notes
•Warehousing Capacity is limited but growing
•Become more efficient
•Never lose sight of the MISSION
Our Vision
A multi-billion dollar market financed by a mix of life insurance companies, banks, pension funds and mutual funds.
Increasing liquidity for investors
Volume sufficient to support trade in the public markets
Better lives for people and stronger communities throughout the nation
Capital for Communities – Opportunities for People
If you would like more information, please contact us.
Frank Altman
Community Reinvestment Fund
801 Nicollet Mall Suite 1700W
Minneapolis, MN 55402
612-338-3050 phone
612-338-3236 fax
Website: www.crfusa.com
Community Reinvestment Fund, USA
Capital for Communities
Opportunities for People