Momentus Securities is proud to announce that it recently served as the structuring agent to help BlueHub Capital and its affiliate, BlueHub Loan Fund, successfully issue $86.8 million of Sustainability Bonds in its second debt offering. The issuance also provides value to investors who purchase these bonds, as they are able to receive tax breaks due to the public benefit they provide.

BlueHub Loan Fund is a leading national nonprofit community development financial institution (CDFI). The financing will support the growth of BlueHub Loan Fund and its portfolio of loans to finance community development projects.

BlueHub Loan Fund helps connect low-income communities with flexible financing to generate equitable and inclusive economic opportunities. It provides financing to affordable housing projects, community health centers, schools, grocery stores and other community assets across the United States.

The proceeds raised by the bonds provide critical scale capital that enables BlueHub Loan Fund to meet borrower credit demand and maximize impact across the communities it serves. The bonds were issued in two tranches, a $60.5 million Series A municipal taxable bond, and a $26.3 million Series B municipal tax-exempt bond—the first ever tax-exempt bond issued by a CDFI.

“We are proud to structure the first-ever municipal tax-exempt bond issuance for a CDFI. This will not only help BlueHub, but it marks a significant leap forward for other CDFIs that may be looking toward the capital markets for the additional capital they need to further serve their communities,” said Mikiyon Alexander, Head of Investment Banking Coverage for Momentus Securities. “CDFIs who tap into the municipal tax-exempt bond market can receive access to cheaper capital. They can share these more affordable, long-term rates with their borrowers — which in turn helps empower historically disinvested communities. And the investors who purchase these municipal bonds are able to receive tax breaks because of the public benefit they provide.”

Funding Will Support Community Development and Education 

The Series A taxable bond proceeds will be used to continue the intentional, disciplined growth of BlueHub Loan Fund by providing mission-critical financing to community development projects that support low-income areas across the Loan Fund’s 23-state geographic footprint. These bonds carry a bullet maturity in 2029.

The Series B tax-exempt bond proceeds will provide long-term financing to existing public charter school borrowers within BlueHub Loan Fund’s portfolio. This innovative “forever financing” product will help these schools stabilize facility costs for up to 20 years by leveraging the Loan Fund’s investment-grade credit rating and strong balance sheet to deliver long-term, cost-saving capital, and to fill a gap in the marketplace. The Series B bonds mature in 2044. Importantly, the tax-exempt bond sale is not only impactful for the continued development of the CDFI sector in the capital markets but also for the further diversification of the lending products that CDFIs can offer to their borrowers.

“BlueHub continues to push the boundaries of community finance to find new ways to meet the needs of the neighborhoods we serve, and this second public bond offering is a great example of that commitment to innovation,” said Elyse Cherry, CEO of BlueHub Capital. “BlueHub was eager to engage Momentus Securities on our bond transaction as an advisor to execute the first ever tax-exempt municipal bond issuance by a CDFI. Their advice on structure, rating and credit enhancement was integral in identifying and securing the most appropriate financing to support our borrowers’ needs and BlueHub Loan Fund’s growth.”

A+ Rating Affirms the Bonds’ Value to Investors

Both bonds were rated ‘A+’ with a stable outlook by S&P Global Ratings, which also reaffirmed the same rating for BlueHub Loan Fund’s 2020 Sustainability Bond and the Loan Fund’s long-term issuer credit rating. According to S&P Global Ratings, the reaffirmed rating reflects BlueHub Loan Fund’s increased capital adequacy, above-average profitability (compared to other rated CDFIs), very strong asset quality, and proactive loan portfolio management.

“We are seeing increasing demand for patient and flexible capital and this new source of funding from the Sustainability Bonds gives us the resources we need to continue building healthy communities where low-income people live and work,” said Karen Kelleher, President of BlueHub Loan Fund.

S&P Global Ratings independently validated BlueHub Loan Fund’s Sustainability Bond, concluding that BlueHub’s loans contribute to or advance eight of the United Nation’s Sustainable Development Goals and align with all components of the International Capital Markets Association’s (ICMA) 2018 Sustainability Bond Guidelines and 2023 Social and Green Bond Principles. Furthermore, approximately $6 million of the bond proceeds will be used to finance solar power projects, resulting in the strongest “dark green” rating from S&P Global Ratings’ Second Party Opinion.

Morgan Stanley served as BlueHub Loan Fund’s sole underwriter. The Series 2024 bonds were oversubscribed and garnered interest from a wide range of institutional investors including impact investors. Moreover, BlueHub successfully expanded its investor base in the transaction.

“Opening the doors so CDFIs can enter the municipal tax-exempt bond market is another example of how the Momentus Securities team is using our collective experience on and beyond Wall Street to drive more institutional investment capital to mission-driven lenders,” said Jaime Aldama, President of Momentus Securities. “This additional funding is needed so that more small businesses and community development facilities can open and grow, creating jobs and generational wealth, and helping people have access to healthy food, education, health care, and affordable housing.”

How Momentus Securities Connects Mission-Driven Lenders With Socially Conscious Investors

Momentus Securities is an investment bank with a social purpose, an SEC-registered broker-dealer, FINRA/MSRB/SIPC member, and an approved SBA 7(a) loan pool assembler.

Momentus Securities works to remove the logjam that mission-driven lenders such as CDFIs, Community Development Corporations (CDCs), Minority Depository Institutions (MDIs), and community banks often run into. These lenders want to support more small businesses and community development efforts. Yet they can’t scale up unless they have more liquidity. And they can’t get more liquidity unless they move deals off their balance sheets.

Momentus Securities is helping to create more of that liquidity by:

• Creating warehousing lines within five key themed areas – affordable housing, healthcare, education, small businesses and food.
• Aggregating portfolios of loans made by all lenders throughout the United States, including mission-driven lenders.
• Helping its clients raise debt capital via bond and note issuances, private placements, and structured credit transactions.
• Providing public and private placement services for municipal issuers, public agencies, private developers, nonprofit organizations, and other mission-driven borrowers.
• Providing secondary market liquidity for community-centric organizations focused on America’s underserved communities.

This means that institutional investors will have the opportunity to invest in those products – and therefore support communities – at a scale that has not previously been available.

Momentus Securities also:

• Provides equity capital raising services to help its clients grow by leveraging an extensive network with impact-driven institutional investors and foundations.
• Offers credit rating advisory services in all ratings considerations, including first-time ratings, rating upgrade/defense, capital structure optimization, and debt capacity analysis.
• Provides liability management and capital advisory services to help clients optimize their capital structure and improve their financial strengths.

About BlueHub Capital


BlueHub Capital is a mission-driven, nonprofit community development finance organization focused on building healthy communities where low-income people live and work. BlueHub uses innovative financial tools to support projects that make communities more vibrant places to live through four distinct programs: BlueHub Loan Fund (community development financing), BlueHub SUN (foreclosure relief), BlueHub Energy (clean energy access) and One Percent for America (citizenship financing).

About Momentus Securities:

Momentus Securities, an SEC-registered broker-dealer and FINRA/MSRB/SIPC member, offers a range of financial products and services to support its mission of connecting mainstream capital sources and impactful investment opportunities. These services include debt and equity capital raising, asset-backed and structured finance as well as corporate finance and advisory services, and will be offered across five key segments: Affordable Housing, Healthcare, Education, Small Businesses and Food. Momentus Securities seeks to bolster the mission-driven investing space by addressing the current scale and liquidity limitations in the sector that inhibit the deployment of institutional capital.

Momentus Securities is part of the Momentus Capital branded family of organizations, which also include, among other organizations, Capital Impact Partners (a nonprofit Community Development Financial Institution, or CDFI) and CDC Small Business Finance (a leading SBA Community Advantage Small Business Lending Company, or CA SBLC).

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