Community Reinvestment Fund saw its most recent private placement transform into its largest security offering to date. The demand for CRF-19, which priced on June 15, indicates this form of socially responsible investment hasn't fallen by the wayside in the dour economic environment.
The securitization, CRF-19, raised $62 million via sole lead agent Piper Jaffray. The vehicle is comprised of notes backed by community development loans and was sold to 12 institutional investors, including Merrill Lynch Community Development Co. and Wells Fargo & Co.
"This particular asset class of owner-occupied small business loans is a significantly lower risk than other commercial loans," said Robert Taylor, president, community investments, Wells Fargo.
Approximately 76% of the private placement, roughly $47 million, was rated triple-A by Standard & Poor's. The offering is backed by a $68.6 million loan pool comprised of 153 loans made by 37 community development lenders. The loan recipients are small businesses spread around 35 states.
The loan pool exceeded the private placement by $6.5 million, creating excess collateral that provided credit enhancement for investors.
Frank Altman, CEO of Community Reinvestment Fund, noted a broader base of investors, including a few first-timers, participated in CRF-19.
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