Bethesda, MD | Sep 24, 2024 | Calvert Impact, Inc. today announced the closing of the second issuance of the Cut Carbon Note, an asset-backed, investment-grade fixed-income product that finances sustainability upgrades for commercial and multifamily buildings to reduce carbon emissions. The Cut Carbon Note program – now totaling more than $50 million in capital raised from more than 100 different investors – received investment grade ratings from Morningstar DBRS and provides an accessible climate investment action for individual and institutional investors. The product ultimately is expected to grow to $400 million.
“We appreciate the participation by over 50 new investors that more than doubled the expected carbon, water, and energy cost savings of the product,” said Justin Conway, Chief Impact Officer of the Cut Carbon Note. “We expect to come to market with larger offerings in coming months.”
Investors in the second series included the David and Lucile Packard Foundation, Federated Insurance, Kachuwa Investment Cooperative, Mary Reynolds Babcock Foundation, National Philanthropic Trust, and clients of CapShift, Figure 8 Investment Strategies, and Natural Investments.
All the portfolio investments use the Commercial Property Assessed Clean Energy (C-PACE) tool, which is available in most U.S. states. Two-thirds of the projects in the Cut Carbon Note portfolio now meet the CIRRUS™ Low Carbon certification, a green building program designed to incentivize developers and building owners to build lower carbon commercial buildings. The CIRRUS program offers cheaper capital when the building meets a lower carbon design. The CIRRUS program is offered by PACE Equity and qualified project designs are verified by the New Buildings Institute, a non-profit dedicated to decarbonization. The program is expected to save over 172,000 metric tonnes of carbon and 130 million gallons of water, along with over $54 million in energy cost savings cumulatively.
“We continue to educate developers and building owners about their long-term climate impact,” shared Beau Engman, founder and president of PACE Equity. “Our engineers help to make green building improvements as painless and as cost effective as possible. The customer satisfaction for our program participants is world class.”
Calvert Impact plans to announce a third issuance of the Cut Carbon Note in coming weeks. The program recently won the 2024 Grunin Prize for Law and Social Entrepreneurship for its innovation, impact, and scalability.
InspereX LLC serves as lead agent on the Cut Carbon Note and U.S. Bank Trust Company serves as indenture trustee and custodian. Morgan, Lewis & Bockius LLP, Warner Norcross + Judd LLP, Husch Blackwell, and Mayer Brown serve as counsels on the program.
Calvert Impact Climate, Inc. is the issuer of the Cut Carbon Notes. The Notes are an asset-backed security and will be issued by and payable exclusively from the assets of Calvert Impact Climate, Inc., a special purpose vehicle.
About Calvert Impact
Calvert Impact is a global nonprofit investment firm that helps investors and financial professionals invest in solutions that people and the planet need. During its 29-year history, the Calvert Impact group has mobilized over $5 billion to grow local community and green finance organizations including through its flagship Community Investment Note® issued by Calvert Impact Capital, Inc. and other products and services, including Access, a small business finance program and the Mission Driven Bank Fund. Calvert Impact uses its unique position to bring the capital markets and communities closer together. More at https://calvertimpact.org.
About PACE Equity
For over a decade PACE Equity has funded Commercial Property Assessed Clean Energy projects in innovative, never-before-seen ways, with better financing for better buildings. PACE Equity has closed C- PACE projects across the U.S. and enabled the energy efficient commercial development of over $2.7 billion while eliminating well over 1 million metric tons of carbon. PACE Equity offers design and support that allow customers to intelligently meet the demands of today’s consumer and tomorrow’s building requirements. More at https://pace-equity.com.
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