b'Building Strong BondsCDFIs and the Ties thatBind CommunitiesFor many years, we have assisted under- for innovation. We subsequently advised writers and selling agents in novel securi- InspereXinconnectionwithCalvert ties offerings by Community DevelopmentImpact Climate, Inc.s issuance of the Cut Financial Institutions (CDFIs). CDFIs areCarbon Note. This debt product finances community-based organizations that have assustainabilityupgradesforcommercial their mission expanding economic opportu- and multifamily buildings to reduce carbon nity in low-income communities, and provid- emissions. In March 2025, Calvert Impact ing financial products and services to under- announced the closing of the third issuance served individuals and businesses. CDFIsof its Cut Carbon Note program, with large may be organized in different formssomeinvestments from an insurance company, CDFIs are organized as banks, credit unionspension funds and an advisory firm. This or thrifts. Others are structured as loan fundsbrings this Notes program to more than $100 or venture capital funds. Perhaps because ofmillion in capital raised from more than 100 their disparate nature, many market par- investors. The program has received invest-ticipants are unfamiliar with these entitiesment grade ratings from Morningstar DBRS. despite their important role. InspereX, aIt has provided an accessible climate invest-fixed income focused investment bank,ment action for both retail and institutional was among the first entities to make retailinvestors. Industry experts project that this bonds issued by CDFIs and related entitiesproduct can be expected to grow to at least accessible to investors.$400 million. Depending on their structure, a CDFIOur interest in the area is more than may issue bonds on an exempt basis, eithertransactional. With the Milken Institute, becauseitisabankorsimilarregu- we have hosted conversations, including a lated financial institution or because it isCDFI Roundtable, gathering policymakers a non-profit entity. The securities gener- and market participants, in order to bring ally are exempt from registration underattention to, and to discuss, the capital mar-the Securities Act; however, they may notkets issues facing CDFIs. Our participation be exempt from state securities registra- in FHLB and Federal Reserve Bank of New tionrequirements,whichofferapatch- York programs on CDFIs relating to CDFI work of exemptions to be navigated in theaccess to capital, as well as our engaging case of debt securities issued by nonprofits.in legislative efforts related to CDFIs that Nevertheless, issuers like Calvert Impact,might improve capital formation, reflect our Inc.,CapitalImpactPartners,Centurycontinuing interest in, and commitment to, Housing Corporation, and Local Initiativesthese initiatives.Support Corporation, among others, have found investor interest for their securities frombothtraditionalfixedincomeand from impact-oriented investors. Medium-term notes and baby bonds paved the way18'