With Racial Equity Bond Issuance, Century Housing Showcases How Blockchain Technology Can Improve CDFI Financing
Bond will provide capital for special purpose credit program dedicated to women and minority developers of affordable housing
Century Housing Corporation has issued a $10 million Racial Equity Bond to further fund Century’s Emerging Developers Program, a special purpose credit program supporting women and minority developers. Structured by U.S. Bank, a mirror issuance of the bond on a private blockchain was conducted to create an entirely digital representation of the bond. The successful mirror issuance is an important step in helping Century Housing and other community development financial institutions (CDFIs) take advantage of blockchain technology to efficiently access capital markets and provide even more transparency to investors.
“We are proud of the investment made by U.S. Bank to support racial and social equity in affordable housing development,” said Century Housing Chief Financial Officer Alan Hoffman. “This bond underscores our mutual commitment to furthering a triple-bottom line of positive financial, social, and environmental outcomes through innovation and forward-thinking. Century is pleased to play a part in advancing financial technology with one of our most trusted partners.”
“It is a distinct privilege for us to bring together the finances, products and innovation U.S. Bank offers to advance racial equity,” said U.S. Bancorp Impact Finance Chairman & CEO Zack Boyers. “We’re intentional about the projects we invest in, the people and organizations we work with, and exploring new initiatives that support people of color and the communities where they live.”
Century’s Emerging Developers Program provides financing for minority- and women-led developers, who disproportionately face barriers in accessing capital. Those reasons can include a lack of capitalization, limited track records, or lack of access to financing on the same terms as more established developers. Century created the special purpose credit program in 2022 under the auspices of the Equal Credit Opportunity Act.
Two examples of projects financed through the Emerging Developers Program include:
- Preservation of an 88-unit senior affordable housing complex in Sylmar by Alliance Property Group in partnership with Community Bible Community Development Corporation; and
- Development of a 61-unit, 100%-affordable, new construction project near the Baldwin Hills Mall and Leimert Park Metro station by Venice Community Housing and Liberty Community Land Trust.
U.S. Bank successfully structured the bond’s mirror issuance, or digital representation of this Racial Equity Bond, on private blockchain R3 Corda. For the mirror issuance, the entire asset creation workflow process, including preparing, placing, and documenting the bond was digital on the bank’s tokenization platform built in partnership with Ownera. In the future, the tokenization process could improve a bond issuance like this by helping issuers like Century Housing more easily connect with potential investors through a digital platform, and provide investors real-time visibility into the bond’s characteristics and progress made on the racial equity components of a project.
“Century Housing is a leader in finding innovative ways to finance projects that improve lives,” said Marcus Martin, Head of ESG & Digital Innovation for U.S. Bank’s global capital markets division. “This successful issuance bodes well for our efforts to help CDFIs enter a new era of efficiency, transparency, and accessibility in the financial world.”
