Grunin Prize-winning green bonds finance decarbonization of commercial buildings and contribute to the clean energy transition
BETHESDA, MD, June 18, 2024 /24-7PressRelease/ — Calvert Impact announced today the second issuance of the Cut Carbon Note, an investment-grade, asset-backed fixed income product issued by Calvert Impact Climate, Inc. The innovative security, which allows individual investors to participate directly in the C-PACE funding market for the first time, won this year’s NYU School of Law Grunin Prize for Law and Social Entrepreneurship.
The new $18.8 million issuance will bring the portfolio to over $52 million in sustainability upgrades for commercial and multifamily buildings, one of the leading sources of carbon emissions. Morningstar DBRS has confirmed the expected ratings, including AAA of the Class A Cut Carbon Notes.
Two-thirds of the projects in the Cut Carbon Note portfolio adhere to the new CIRRUS™ Low Carbon Standard, a higher sustainability standard that was developed by PACE Equity and the New Buildings Institute. One of the new projects is the headquarters for LactaLogics, a healthcare company that will expand its ability to provide healthy human milk nutrition for premature and at-risk infants, while benefiting from the reduced costs the financed energy efficiency upgrades will provide.
Overall, the portfolio is currently expected to save over 172,000 metric tons of carbon, provide more than $54 million in energy cost savings, and conserve over 130 million gallons of water. “In addition to the measurable impact the growing portfolio will have, we’re also seeing growing adoption of the CIRRUS™ Low Carbon Standard that raises the bar on commercial energy efficiency,” said Tricia Baker, senior vice president at PACE Equity.
The Cut Carbon Note won the 2024 Grunin Prize for Law and Social Entrepreneurship at NYU Law. The global prize recognizes legal teams developing innovative and impactful financial projects, and the judges noted the Cut Carbon program for its impact, scalability, and allowance of broad retail investor participation in a securitization structure that was previously only available to institutional investors. The award was given to Charles Sweet and Jeremiah Parker, partners and counsel at Morgan Lewis, and Emmeline Liu and Alyse Young, Calvert Impact’s in-house legal counsel. Additional counsels involved included Warner Norcross + Judd LLP, Husch Blackwell, and Mayer Brown.
“Reducing carbon emissions from buildings can play a large role in addressing the climate crisis,” said Liu. “By removing obstacles to constructing greener buildings, we’re helping to change the way we build and speed the transition to a clean energy future.”
InspereX LLC serves as lead agent on the Cut Carbon Note and U.S. Bank Trust Company serves as indenture trustee and custodian. 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, Calvert Impact has mobilized approximately $5 billion to grow local community and green finance organizations through its flagship Community Investment Note® issued by Calvert Impact Capital, Inc. and other products and services. Calvert Impact uses its unique position to bring the capital markets and communities closer together.
Calvert Impact Climate, Inc., a 501(c)(3) nonprofit and a subsidiary of Calvert Impact, Inc., offers the Cut Carbon Note. Calvert Impact Capital, Inc., a 501(c)(3) nonprofit and a subsidiary of Calvert Impact, Inc., offers the Community Investment Note. The Community Investment Note and Cut Carbon Note are subject to certain risks, are not a mutual funds, are not FDIC or SIPC insured, and should not be confused with any Calvert Research and Management-sponsored investment product. Any decision to invest in these securities through this Site should only be made after reading the applicable prospectus or by calling 800-248-0337.
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