On August 29, 2019, the Equitable Facilities Fund (EFF), a nonprofit social impact fund, closed on the issuance of US$111 million in tax-exempt bonds to advance its mission of supporting an equitable, high-quality public education for all students by offering financing to qualified public charter schools to develop, expand and renovate facilities. EFF created the Equitable School Revolving Fund (ESRF) to hold the school loans in a Trust. Squire Patton Boggs served as lead underwriters’ counsel.
ESRF’s revolving loan program was modeled after state revolving long funds for clean water projects that receive sizable federal grants, use these grants and proceeds of bond issuances to fund loans that are pooled and used to secure further issuances of high-grade tax-exempt bonds to revolve the fund. ESRF received an initial US$200 million philanthropic grant in 2018, which will fuel ESRF’s A-rated revolving loan fund credit structure and access to low-cost capital via the tax-exempt bond market. Similar to securities issued to finance water revolving funds, the ESRF will allow investors to diversify risk, while providing greater scale and liquidity. Investors are able to engage while benefiting from an A-rating bond.
Squire Patton Boggs was selected by RBC Capital Markets for its depth of knowledge and experience in the structuring of water and wastewater revenue debt financing and, in particular, pooled financing transactions. The firm assisted in the structuring of this first-of-its-kind financing. The firm’s team was led by Cleveland partner Ryan K. Callender, who has served as bond, disclosure and underwriter’s counsel on over US$5 billion of debt issuances for state revolving funds, with Alexander G. Burlingame, Michael A. Cullers, Nathan A. Treu and Ben Tobias.