ML376 Raising Debt and Equity from External Sources
The primary focus of this course is on which funding sources and mechanisms will provide sources of capital for CDFIs in the near term and why. The course will also focus on what the CDFI can expect in the context of pricing, terms and conditions. This course covers: • Banks: the nature of their business and the regulatory and profit constraints under which they operate that impact the ability to assist CDFIs. • Major participants in the capital markets: banks, credit unions, insurance companies, pension funds, GSEs, and mission investors. • Alternative sources of capital available to CDFIs including pension funds, endowments (e.g., University endowments), Program Related Investments, individual investors, and other institutional investors (e.g., religious institutions.) • Explanation of basic financial concepts and terminology that these entities utilize in evaluating and discussing investment opportunities (e.g., LIBOR, Prime rate, borrowing base, IRR, NPV, liquidity risk, concept of investment tranches, credit enhancement, etc.). • Financing vehicles: bonds, securitization, commercial paper, and insurance. • Current state of the markets and how that affects various sources. • Progress of CDFIs in expanding financing options and the remaining impediments (e.g., need for standardized reporting and analytics, and economies of scale). • Financing vehicles that make the most sense for CDFIs in the current environment: participations, loan pools, sales to secondary markets, PRIs, Co-operatives, EQ2. Examination of the pros and cons of each source and which sources make most sense for CDFIs based on their size, experience and history. The material used will come from the Orientation to the Capital Markets, the conferences set up by the Federal Reserve Banks and the Financial Innovations Roundtable and presented at Federal Reserve Banks around the country. These materials include definitions, tools, structures, and “how-to” methodologies for the range of potential funding activities in the conventional and capital markets. The session will also draw heavily on the new book, CDFIs, Capital Markets and Organizational Credit Risk, recently published by the Carsey Institute.

Course length: 1 Days

Tuition: $ 250

Course counts toward a professional certificate: No