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New Rates To Meet The Moment
May 16, 2022
With the Federal Reserve raising interest rates quickly, questions abound on if/how/when impact investing products will react. Impact investment portfolios are largely uncorrelated to public market benchmarks and often unable to keep up with rapidly rising borrowing costs. This is most clearly the case in US community development sectors that are focused on helping lower-income people make it through these challenging times.
At Calvert Impact Capital, while we see similar constraints in parts of our portfolio, given our broad reach in financing social and environmental solutions in communities globally, we are now seeing some of our portfolio partners marginally increasing rates on the loans they originate. As such, we’re increasing rates on our Community Investment Notes® today.
| Term | Old Rates | New Rates as of May 16, 2022 |
|---|---|---|
| 1 year | 0.40% | 0.50% |
| 3 year | 1.00% | 1.50% |
| 5 year | 1.50% | 2.50% |
| 10 year | 2.50% | 3.00% |
This does not change the rates of any existing Notes, only new Notes opened on or after May 16, 2022.
Our rates are determined by the financing needs of our portfolio partners and not the broader market forces that make headlines. Our investors know that we have not changed rates often – increasing rates a single time in 2016 and in 2018, and then lowering once in 2020 and in 2021, and now raising today. We always base our rates on the portfolio pricing demand we see going forward in the impact sectors and communities we serve.
Overall, we strive for consistency with the Community Investment Note® – a product that has paid investors returns on over $2 billion invested, while consistently creating measurable impact for over 26 years. Thanks to our investors for continuing their support in meeting the needs of communities.
