Standard & Poor’s Global Ratings (S&P) has upgraded its issuer credit rating for the Enterprise Community Loan Fund (ECLF)—the community development financial institution (CDFI) of Enterprise Community Partners (Enterprise)—and its long-term rating on ECLF’s series 2018 taxable sustainability bonds from “A+” to “AA-.”
ECLF’s strong asset quality due to proactive portfolio management, its return-on-average assets during the past five years, its management team, and its continued ability to attract and use low-cost capital to finance mission-driven portfolio growth were cited as factors driving the upgrade.
Its diverse, nationwide loan portfolio includes projects like the $7.2 million bridge loan to Enterprise Community Development and Fellowship Square Foundation for Lake Anne House, recently named the 2023 “Best Overall Project” and “Best Senior Development” by Affordable Housing Finance’s Readers’ Choice Awards. The community was selected for its preservation of affordable housing that has enabled 300-plus culturally diverse, low-income residents to age in place in Fairfax County, one of Virginia’s most expensive counties.
The CDFI has played a vital role in connecting communities to much-needed capital and meeting Enterprise’s goals to increase housing supply, advance racial equity, and build resilience and upward mobility. Close relationships with community partners; city, state and federal officials; and public and private institutions have been key to a strong portfolio performance, helping to mitigate risks associated with early-stage financing critical to advancing community projects nationwide.
The S&P rating has allowed ECLF to access the capital markets and raise $50 million through its 2018A taxable sustainability bonds.
With 13 rated CDFIs, S&P has begun producing trend analysis with their industry outlook. In their most recent report, What U.S. CDFI Ratios’ Resilience Through Changing Economic Landscapes Means For Long-Term Credit Quality, S&P projected that the new equity of U.S. CDFIs will decrease modestly in the near term, but also remain strong and sufficient to absorb additional leverage, reducing the likelihood of widespread negative rating actions.
For more on the S&P opinion, visit spglobal.com/ratings.