Course Details

This advanced course focuses on how CDFIs and community development loan funds raise capital. Participants will learn about different funding sources and mechanisms and what they should expect in pricing, terms and conditions. This course covers:

• Banks: the nature of their business and the regulatory and profit constraints under which they operate that impact the ability to assist loan funds.
• Major participants in the capital markets: banks, credit unions, insurance companies, pension funds, GSEs, and mission investors.
• Alternative sources of capital available to loan funds including pension funds, endowments (e.g., University endowments), Program Related Investments, individual investors, and other institutional investors (e.g., religious institutions.)
• Explanation of basic financial concepts and terminology that these entities utilize in evaluating and discussing investment opportunities (e.g., LIBOR, Prime rate, borrowing base, IRR, NPV, liquidity risk, concept of investment tranches, credit enhancement, etc.).
• Financing vehicles: bonds, securitization, commercial paper, and insurance.
• Current state of the markets and how that affects various sources.
• Progress of CDFI loan funds in expanding financing options and the remaining impediments (e.g., need for standardized reporting and analytics, and economies of scale).
• Financing vehicles that make the most sense for loan funds in the current environment: participations, loan pools, sales to secondary markets, PRIs, Co-operatives, EQ2. Examination of the pros and cons of each source and which sources make most sense for loan funds based on their size, experience and history.

Course materials include definitions, tools, structures, and “how-to” methodologies for the range of potential funding activities in the conventional and capital markets.

Course Length: 2 Days

Tuition: $770.0

Course counts toward a professional certificate (PCP): No