Project Details
Project
CSCDA Community Improvement Authority Social Bond Framework Second-Party Opinion
Client
The California Statewide Communities Development Authority
Project Type
Social Bond/Loan
Industry Group
Sovereign
Use of Proceeds
Affordable housing
Location
U.S.
Evaluation Date
Jan 2021
Evaluation Summary
Sustainalytics is of the opinion that the CSCDA Community Improvement Authority Social Bond Framework (the “Framework”) is credible and impactful and aligns with the four core components of the Social Bond Principles 2020. This assessment is based on the following:
USE OF PROCEEDS
The eligible category for the use of proceeds, Workforce Housing Program (the “Program”), is aligned with those recognized by the Social Bond Principles that seek to achieve positive socio-economic outcomes through investments in affordable housing for middle-income population in California. Sustainalytics considers that the eligible category will lead to positive social impact and advance the UN Sustainable Development Goals, specifically SDGs 10 and 11.
PROJECT EVALUATION/SELECTION
All eligible acquisitions and financings undertaken by the CSCDA Community Improvement Authority will be reviewed and approved by the Authority’s Financial Advisor and Insurance Consultant. The Authority’s Executive Director will then recommend adoption of projects by the Board of Directors. Sustainalytics considers the project selection process in line with market practice.
MANAGEMENT OF PROCEEDS
The Authority will appoint property managers to track the revenues earned from the acquired properties and manage repayment to the bond trustees. The funds raised from the issuance of social bonds have been or will be used exclusively for activities that meet the eligibility criteria, with immediate allocation of all proceeds at the time of bond settlement. This is in line with market practice.
REPORTING
The CSCDA Community Improvement Authority intends to publicly report on allocation of proceeds, where feasible, on an annual basis. The Framework mandates it to publish annual leasing updates, as per the disclosure requirements under the continuing disclosure agreement and the financing document requirements for each property financed under the Program. In addition, the Authority is committed to reporting on relevant impact metrics. Sustainalytics views the Authority’s allocation and impact reporting as aligned with market practice.