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EFF Announces $300M in Bonds from 50+ Investors; Expands Low-Cost Short-Term Lending

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December 12, 2023


EFF continues successful long-term loan program and launches short-term low-rate offerings to support high-potential schools

This week, I’m pleased to report that Equitable School Revolving Fund has closed its fifth “A” rated bond offering.

This was our largest issuance yet, raising $300 million that will directly support the most affordable facilities loans available to high-performing public charter schools across the country. Portions of this year’s offering were more than 18x oversubscribed, driven by a rocksteady ESRF investor base that now includes over 85 savvy bond investors.  Thank you for your resounding support and belief in our schools. 

While this latest round represents the steady growth and exceedingly positive investor reception that EFF has earned through ceaseless transparency, rigorous underwriting and unrelenting support of schools, it also represents a rededication to our primary strategy, to ensure that schools have access to the financial resources they need to thrive, even in challenging macro-rate environments. 

High interest rates should not take money out of our classrooms.

When the pandemic threw the capital markets into chaos, EFF capped interest rates for our schools so they could continue to grow through uncertainty.  

Despite today’s high-interest rate environment,  EFF will offer more than $150 million in short-term loans at interest rates lower than 5% in the months to come. These loans will cover 100% of project costs (with zero equity requirement) so all schools can have the homes they deserve without struggling to patch lending gaps with philanthropy or their operating dollars.

For high-potential, early-phase schools, short-term lending offers a path forward during unfavorable market conditions. These loans will bridge schools to long-term affordability - and save them hundreds of thousands of dollars per year in the interim. Since 2017, EFF has redirected more than $250 million in interest savings back into the classrooms of 170 schools nationwide.

As of 2022, the charter bond sector has now been active for 25 years, a milestone this community can be proud of. EFF’s philanthropic backing represents the next evolution of this important work, allowing us to raise money at lower rates on behalf of great schools. It ensures that no matter the market conditions, we are going to keep showing up where we are needed most. 

In partnership,

Anand Kesavan

CEO, Equitable Facilities Fund

Learn more about our latest closing here and check out recent coverage.

Just Released: 2022 Charter Sector Default Bond Study

Did you know that as of 2022, the tax-exempt charter school bond sector has been active for 25 years?

A full-fledged municipal bond sector with nearly 2,300 transactions issued to date, there is now a significant track record of repayment performance that we can look to for future guidance. A new report from EFF dives deep into 25 years of trends.

Among the findings:

  • Over $41 billion in tax-exempt bonds have been issued over the past 25 years. 
  •  As the market continues to mature, default rates are declining with less than a 2% default rate by dollar amount for rated transactions. 
  • The loss rate for all transactions reported through 2022 is less than 1%.