The Equitable School Revolving Fund (ESRF), a non-profit social impact fund created by the Equitable Facilities Fund (EFF), has been named a 2021 recipient of Environmental Finance’s Social Bond of the Year Award for the US muni bond category. The award recognizes ESRF’s innovative fund structure and 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. Squire Patton Boggs served as underwriters’ counsel.
Environmental Finance selected ESRF for its US$170 million 2020 bond issuance, making it the largest deal to receive this distinction in the US education sector. The Social Bonds were eight times oversubscribed and offered investors a similar return on a 30-year maturity as a muni bond, but with the added benefit of an impact component. Since launching in 2018, this fund has committed more than US$450 million of affordable financing across 14 states.
ESRF’s “A” rated, revolving loan program was modeled after state revolving long funds for clean water projects that receive sizable federal grants, and 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. Selected by RBC Capital Markets, Squire Patton Boggs assisted in the structuring of this first-of-its-kind financing.
“Congratulations to EFF on this recognition and for its leadership in impact investments in the education space,” said Squire Patton Boggs partner Ryan K. Callender, who led the firm’s team. “We are proud to have been involved in such a landmark financing that will provide life-changing opportunities for students, particularly those in low-income and underrepresented communities.
Investors are looking to promote racial and social equity through their investments. We would like to envision the unique structuring of this fund will serve as a template that can be replicated not only across the educational sector, but also others that desperately need funding.”
In addition to Mr. Callender, the firm team included Michael A. Cullers and Ben Tobias.