Perkins Coie Closes $125M US Treasury Guaranteed Bond for CRF, CDT

By Joshua Ayers, Senior Editor

Chicago—Perkins Coie has announced that it has closed a $125 million U.S. Treasury guaranteed bond issue for Minneapolis-based Community Reinvestment Fund Inc. (CRF) and Community Development Trust LLP (CDT). The bond, one of three issued, will help provide low-cost capital to invest in affordable housing loans.

CRF, a non-profit organization, works to improve the lives of disadvantaged people by strengthening distressed communities through innovative financing and CDT is the only private REIT with a public purpose, focusing on the preservation and expansion of affordable housing supply.

The Perkins Coie team was led Chicago partner Bruce Bonjour and included Washington, D.C., Senior Counsel Darvin Davitian and Chicago associates Melissa Oka and Jaime Willis.

“This was truly a collaborative effort between Community Reinvestment Fund and Community Development Trust, two innovative leaders in the field of community development who had not previously worked together on a major transaction,” Bonjour tells MHN.

The bond issue granted to CRF was the largest of the three initial series bonds issued this month under the Community Development Financial Institutions (CDFIs) Fund Bond Guarantee Program that was authorized by, and completed under, the Small Business Jobs Act of 2010. Other bond issues granted in the inaugural round include Bank of America CDFI, which was issued $100 million to be used to make loans of $50 million each to Local Initiatives Support Corp (LISC) and Enterprise Community Loan Fund, as well as $100 million to Opportunity Finance Network, which will originate a loan to Clearinghouse CDFI.

Established by the Small Business Jobs Act, the CDFI Bond Guarantee Program directs the treasury to guarantee the full amount of the bonds issued to support CDFIs that invest in eligible community and economic development projects.  According to the U.S. Treasury Department, the bonds can be used for financing for small businesses, seniors living and long-term care facilities, charter schools and commercial real estate in low-income or underserved rural areas.

“The CDFI Bond Guarantee Program expands Obama Administration efforts to meet the economic and community development needs of underserved urban and rural areas,” says Mary J. Miller, undersecretary for domestic finance at the U.S. Treasury Department. “These borrowers have a national footprint in community development financing and a solid history of delivering quality affordable housing and community facilities. This new tool–the first of its kind by the CDFI Fund–will help these organizations make even more critical investments in communities across the country.”

According to CRF, CDT will use the $125 million bond proceeds to “support and expand the supply of quality affordable housing in underserved communities across the country.”

“Our years of experience as an intermediary, helping to develop innovative government financing programs such as this, prepared us to navigate through this successful inaugural round with our respected partners at CDT,” says Frank Altman, CRF president and CEO. “As a CDFI, we understand the critical need for long-term, fixed-rate financing and have a track record of collaborating with our peers to launch innovative products. We look forward to expanding our collaborative efforts related to this program to include more of our CDFI partners and bring this much needed source of capital to underserved communities.”