Ford Foundation Social Bond Offering Reflects Historic, Unprecedented Action to Increase Grantmaking for Nonprofits by $1 Billion with Proceeds of Offering of Social Bonds in Response to COVID-19
The Ford Foundation’s Social Bonds, Series 2020 (taxable) are comprised of (2) tranches; $300mil 2.415% due June 1, 2050, and $700m 2.816% due Jue 1 2070, have been underwritten by joint lead managers Wells Fargo Securities and Morgan Stanley. Mischler Financial Group, Inc. is honored to be among the select diversity-certified co-managers who have participated in the offering. Rick Tilghman, Mischler Financial Group’s Managing Director of Public Finance pointed out that Ford is the first nonprofit foundation in history to offer a labeled Social Bond in the U.S. taxable corporate bond market.
Wells Fargo Securities is additionally serving as the Lead Sustainability Structuring Agent related to the Social Bond designation. The foundation’s Social Bonds have been assigned Aaa/AAA credit ratings from Moody’s Investors Service and Standard & Poor’s, respectively. Sustainalytics has provided a Second Party Opinion on the alignment of the foundation’s Social Bond Framework with the International Capital Market Association’s Social Bond Principles.
Use of Proceeds: Any lawful corporate purposes, including, but not limited to, providing grant funding in furtherance of its charitable purposes, primarily in order to make grants directed at building resilience in the nonprofit sector and stabilizing and strengthening key nonprofit organizations, as well as to pay costs related to the issuance of the Bonds. Grantmaking initiatives will help strengthen mission-critical social justice and creative expression organizations.
Per the formal announcement from the Ford Foundation, “The net proceeds of the bond sale will enable the foundation to pay out more than 10 percent of the value of its total endowment in 2020 and 2021, which is double the level of grantmaking required by law.”
The offering of the Social Bonds is not being registered under the Securities Act of 1933, as amended, in reliance on the exemption from registration contained in Section 3(a)(4) thereof. The offering is being made only by means of an offering memorandum.
For additional information pertaining to the International Capital Market Association (ICMA) guidelines for Social Bond issuance, please click here