Commerce Home Mortgage Raises $50,000,000 of Preferred Equity to Expand Access to Capital to Minority and Low-Income Americans
Originally published in BusinessWire
October 19, 2020, 09:05 AM EDT
- Consortium of environmental, social, and corporate governance minded investors (“ESG Investors”) participated in the offering
- Commerce Home Mortgage to use proceeds to increase lending to over $10 billion in 2021
- Fourteen banks participated to further their Community Reinvestment Act (“CRA”) goals
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 $50 million of cumulative, perpetual preferred equity units (the “Preferred Equity Units”) by a consortium of socially responsible ESG Investors, including community and regional banks.
Commerce will use the net proceeds from the Offering to increase lending to Black, Latino, Indigenous and other minority and low-income borrowers and communities – including those in persistent poverty counties. Commerce expects to grow its lending to well over $10 billion in 2021 to further its community development mission of lending to the unbanked.
Rev. Everett Bell, Chair of Commerce’s Community Advisory Board, stated, “We are excited to partner with these socially responsible banks to increase access to capital for minority and low-to-moderate income communities often left behind by traditional financial institutions. This capital raise supports our mission to address the needs of Black, Latino 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, “Strong capital partners are critical to Commerce’s ability to expand access to capital to underserved minority and low-income borrowers. We are inspired to have earned the support of the ESG Investors who invested in this offering. Raising capital on terms consistent with the most creditworthy financial institutions ratifies our community efforts, contributes to our strength and soundness, and empowers us to expand our lending to well over $10 billion in 2021. This Offering is a win-win-win for Commerce, its new capital partners, and underbanked borrowers in need of Commerce’s critical financial services.”
The Preferred Equity Units bear a cumulative, preferred return of 5.00% per annum, paid quarterly (and subject to an annual adjustment based on CRA lending credit earned by bank investors).
Performance Trust Capital Partners served as 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, founded in 2017, is a CDFI general partner venture fund that seeks to give credit to the American dream by expanding access to capital to prime, underbanked borrowers. 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 subsidiary, Commerce Home Mortgage, as its managing member. For more information: http://www.thecapitalcorps.com/
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Contacts
Blake Brooks
Blake.Brooks@thecapitalcorps.com
310-310-0514