Equitable Facilities Fund Announces Fourth Bond Issuance to Support Educational Equity

Since 2017, the philanthropy-backed impact fund has secured $800 million to capitalize its innovative financial model that supports excellent – and equitable – K-12 schools.

NEW YORK, Aug. 30, 2022 /PRNewswire/ -- Equitable School Revolving Fund (ESRF) announced that it has closed over $230 million of A-rated "Social Bonds" to support its mission to provide affordable facilities access to high-performing, high-impact public charter schools across the U.S.

The funds will enable ESRF's program administrator, Equitable Facilities Fund (EFF), to expand its portfolio of school borrowers that currently provide excellent education options to more than 60,000 students, over 80% of whom are economically disadvantaged and identify as people of color.

The fourth round of bonds issued by ESRF will recapitalize EFF's philanthropy-backed impact fund, which since its launch in 2017 has provided over $800 million in financing to support 120 schools across 35 cities in 19 states. Each series has earned a Social Bond designation from Kestrel Verifiers, signifying the high social impact of the school portfolio.

In July, S&P Global Ratings also reaffirmed ESRF's 'A' rating, and revised its outlook from stable to positive, citing "ongoing diversification of the loan portfolio" and "good operating performance during the program's three-year history." The positive outlook for this latest offering resulted in high demand from both new and repeat investors, bringing the total investor count to 67.

While charter schools receive public funding per student, they often have inequitable access to quality school facilities. EFF is designed explicitly to level this playing field by using an innovative model to provide low-cost loans for schools to undertake their own facility projects. It is a strategy that has so far directed more than $160 million in savings back into EFF's portfolio schools, where 90% of students outperform their district peers.

"Parents have spoken loud and clear that they value high-performing public schools for their children. Now investors have spoken clearly that they, too, value investments that benefit families and communities," said EFF Founder and CEO Anand Kesavan. "Our portfolio schools are transforming communities. As we approach $1 billion in loan capital, it's now clear that investors also see this value," says Kesavan.

EFF's strong foundation creates the opportunity to innovate and expand to help more students and offers bold funders a more efficient use of their philanthropy. So far, EFF has raised $300 million of philanthropy buttressing the fund's credit structure and ability to provide outsized loan savings for schools. Now, the team is campaigning to raise an additional $200 million to seed a second fund, through which EFF will deploy a total of more than $2.5 billion in loans by the end of 2027.

In another innovation for the sector, EFF launched a Texas Facility Fund with over $20 million in philanthropic support from local foundations that will leverage over $200 million of school financing in the state. "We are pleased to see local foundations and social investors take note of EFF's innovative lending model. The strength of our national platform can now be unleashed to advance racial and educational equity in our most vulnerable regions," added Kesavan.

EFF plans to launch several state-based low-cost revolving loan funds. If you are interested in learning more about EFF's place-based initiatives or launching a revolving loan fund in your state, please contact Mike McGregor at [email protected].

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