PHILADELPHIA, Oct. 9, 2015 /PRNewswire-USNewswire/ -- The
Reinvestment Fund announced today that it has received a AA issuer
credit rating from Standard & Poor's Rating Services (S&P).
The Reinvestment Fund is the largest community development
financial institution (CDFI) to receive an S&P rating, and one
of only a handful to date. This rating is a powerful recognition of
The Reinvestment Fund's strong track record of meeting its
financial commitments through the strategic investment of capital
to revitalize struggling communities.
"The AA rating reaffirms The Reinvestment Fund's financial
strength and business discipline," said Don
Hinkle-Brown, CEO of The Reinvestment Fund. "We have always
received the top rating from Aeris, the CDFI industry rating
system. The S&P rating takes us a step further by
contextualizing our strength within a financial assessment
framework that is widely understood and accepted. It is a
significant achievement as we work to reach capital resources that
are unfamiliar with us and our industry."
The AA rating is globally recognized by investors as a signal of
creditworthiness. It offers The Reinvestment Fund a common language
with which to communicate to investors, and has the potential to
open new capital markets to the organization. The Reinvestment Fund
relies on investments to support its financing activity aimed at
catalyzing change in distressed communities that do not have access
to traditional capital sources. However, some potential investors
avoid financing community development projects because of the
perceived risk involved. The strong, investment-grade credit rating
helps these investors understand The Reinvestment Fund and lowers
barriers for engagement. This also enables large financial
institutions to more easily identify opportunities to fulfill their
CRA requirements.
S&P determines a credit rating by evaluating how both market
and institutional risk affect revenue generation and ability to
service debt. S&P's assessment of The Reinvestment Fund
included a careful analysis of the organization's earnings quality
and stability, financial strength, asset quality, debt levels and
types, and overall strategic management. While S&P emphasized
financial performance and strategic management during its rating
process, it also took into account The Reinvestment Fund's 30 years
of impact. The Reinvestment Fund's strong records of social impact
were an indication of effective management and risk-mitigation—both
important criteria in S&P's evaluation.
"The rating reflects our view of The Reinvestment Fund's minimal
loss exposure, which can be absorbed through its reserves and
unrestricted equity," said S&P's credit analyst Mikiyon
Alexander, "and extremely low-risk debt profile."
The Reinvestment Fund is particularly grateful to its current
850 diverse investors, who have had confidence in its ability and
mission long before having a conventional rating. Since the
organization's founding in 1985, its investors have supported the
deployment of over $1.5 billion in
community investments across the country.
The AA credit rating will facilitate new partnerships with
investors—thereby equipping The Reinvestment Fund to build on its
successes, pioneer valuable innovations in community development
finance, and continue to expand its impact through strategic
investment that increases opportunity and wealth for people and
places in need nationwide.
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SOURCE The Reinvestment Fund