Commerce Home Mortgage Closes Follow-On Preferred Equity Offering
Originally published in BusinessWire
December 30, 2020, 08:00 AM EST
- Financing brings total issuance of preferred equity to over $80 million.
- Commerce’s preferred equity investors now include 18 socially responsible banks.
- Commerce to expand lending in the Southwest, Midwest, and Southeast markets.
IRVINE, Calif.--(BUSINESS WIRE)--Commerce Home Mortgage, LLC (“Commerce”) – one of America’s largest Community Development Financial Institutions (“CDFI”) – announced today the pricing and closing of a private placement (the “Offering”) of $31.5 million of cumulative, perpetual preferred equity units (the “Preferred Equity Units”). The Offering brings Commerce’s outstanding Preferred Equity Units to $81.5 million. Investors in the Preferred Equity Units include 18 socially responsible banks seeking to expand access to capital to low-income borrowers and communities throughout their market service areas.
Commerce will use the net proceeds from the Offering to increase lending to Black, Latino, low-income, and underbanked borrowers and communities – including those in the Southwest, Midwest, and Southeast. Commerce expects to grow its lending to over $10 billion in 2021 to further its community development mission of lending to the underbanked.
Rev. Everett Bell, Chair of Commerce’s Community Advisory Board, stated, “We are honored that our platform continues to serve as an effective conduit for socially responsible banks to increase access to capital for minority and low-to-moderate income communities often left behind by traditional financial institutions. This additional capital will continue to strengthen our mission to address the needs of Black, Latino, low-income and historically underserved communities across the country. We thank our new partners for their participation in our commitment to bringing greater social equity to many of the communities that we serve.”
Steven Sugarman, Founder of The Capital Corps, LLC – the CDFI-certified venture fund that acquired Commerce in 2018, added, “We are excited to increase our bank partnerships as we expand our lending across America. Commerce’s ability to partner with depository institutions on terms consistent with our investment grade rating ratifies our team’s hard work, contributes to our company’s strength, and empowers our critical mission. We look forward to further expanding our partnerships, services, and reach in the new year.”
The Preferred Equity Units, which received an investment grade BBB+ rating from Egan Jones, bear a cumulative, preferred return of 5.00% per annum, paid quarterly (subject to an annual adjustment based on community development regulatory credit earned by bank investors).
Performance Trust Capital Partners served as an exclusive financial advisor to Commerce and sole placement agent in the Offering. Michelman & Robinson, LLP served as Commerce’s legal counsel and Hunton Andrews Kurth LLP served as Performance Trust’s legal counsel in the Offering.
About Commerce Home Mortgage, LLC
Commerce Home Mortgage, founded in 1993, is a national mortgage banking company that is certified by the United States Department of the Treasury and the State of California as a Community Development Financial Institution.
For more information: http://www.commercehomemortgage.com/
About The Capital Corps, LLC
The Capital Corps is certified by the United States Department of the Treasury and the State of California as a Community Development Financial Institution and oversees its subsidiaries, including Commerce Home Mortgage.
For more information: http://www.thecapitalcorps.com/
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This press release does not constitute an offer to sell, a solicitation of an offer to sell or the solicitation of an offer to buy any securities. There will be no sale of securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
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Contacts
Blake Brooks
Blake.Brooks@thecapitalcorps.com
310-310-0514
