CRF USA Issues First Community Development Note Offering Rated by Standard & Poor's; AAA Rating Issued by Standard & Poor's on $26 Million of $46.1 Million Note Offering.

MINNEAPOLIS -- Community Reinvestment Fund (CRF), USA, a nonprofit organization that fulfills funding needs of community-based lenders by connecting them with the capital resources of Wall Street, today announced it closed the first note offering rated by Standard & Poor's to be backed by community development loans. This achievement strengthens CRF's connection to the capital markets while providing funding to small businesses in underserved communities.

In this offering, which is the 17th in a series offered by CRF, the highest class of notes -- totaling approximately $26 million -- received an AAA rating from Standard & Poor's. The $51.1 million pool of loans backing the notes consists of 128 loans made by 37 community-based lenders to small businesses in 19 states, including California, Minnesota, Utah and Colorado. The loan pool, which includes loans made to small businesses and for small affordable rental housing properties, exceeds the amount of the notes offered by $5 million. This excess collateral is part of the credit enhancement provided for purchasers of the notes. The rated notes were offered through Piper Jaffray & Co., a focused securities firm headquartered in Minneapolis.

"We are thrilled to bring the first rated community development offering to the capital markets and to do so with an AAA rating from Standard & Poor's," said Frank Altman, president and chief executive officer for CRF. "This rated offering has enabled us to attract new investors that previously were unable or unwilling to invest in our prior non-rated offerings. In fact, the AAA and A rated notes in the CRF 17 offering were oversubscribed, indicating there is great interest and momentum in the market for this type of rated transaction. By appealing to a broader group of investors, we can expand the amount of capital we provide to low-income and disadvantaged communities across the nation."

A number of leading foundations and financial institutions -- including Fannie Mae Foundation, F.B. Heron Foundation, MetLife, US Bank and Wachovia -- provided the warehouse financing that allowed CRF to generate a large enough loan pool for a rated transaction.

"Enhancing community access to capital is a key component of the Fannie Mae Foundation's mission: expanding the availability of homes that working families can afford," said Stacey D. Stewart, president and chief executive officer of the Fannie Mae Foundation. "At a time when traditional sources of financing continue to shrink, it is critical for the community lending industry to strengthen its ties with the capital markets. We are proud to have played a role in bringing new capital to community development organizations -- and thereby helping to bring new opportunities for affordable housing to the people they serve."

"At the F.B. Heron Foundation, we recognize how important access to capital is for low-income people and communities. It means being able to start or expand a business, build or preserve affordable housing, or provide needed community facilities," said Sharon B. King, president of the F.B. Heron Foundation. "In our view, the ability of the Community Reinvestment Fund to securitize loans successfully for this purpose can do for community development what the secondary market for home mortgages did for the homeownership rate in the United States in recent decades. This is a very important development and we are pleased to be a part of it."

Many institutions that invested in CRF's previous note offerings participated in this recent offering, including Merrill Lynch, AXA Equitable Life Insurance Company, Wells Fargo, US Bank, Prudential Financial, Inc., General Board of Pension & Health Benefits of the United Methodist Church, MetLife, and ELCA Pension Fund. In addition, the rated nature of the current offering prompted a variety of first-time CRF investors to participate, including Northwestern Mutual, Access Capital Strategies and CRA Fund Advisors.

"Northwestern Mutual has long had a high level of interest in pursuing socially responsive investment opportunities," said Mark Kishler, managing director of investments for Northwestern Mutual. "CRF's current offering provides us with a highly efficient and attractive channel for ensuring our investments produce a substantial community impact, while generating a market rate of return."

This first rated economic development note offering marks the culmination of a year-long collaboration between CRF and a number of private foundations, financial institutions, and nonprofit and academic experts. The concept originated at the Financial Innovations Roundtable (FIR), a symposium sponsored by the School of Community Economic Development at Southern New Hampshire University. FIR brings community development lenders together with capital markets institutions to further the field of community development finance.

Following the work initiated at FIR, Wall Street Without Walls (WSWW) worked closely with CRF to orchestrate the execution of the first rated offering, providing counsel to CRF throughout the thorough and methodical review and documentation process conducted by Standard & Poor's. WSWW, an alliance of finance professionals and Wall Street executives, is the leading source to prepare and assist community development organizations to access the capital markets.

About CRF

Community Reinvestment Fund USA, a Minneapolis-based nonprofit organization, is the nation's leader in bringing capital to public and private nonprofit community development lenders through the secondary market for loans. Formed in 1988, CRF has injected hundreds of millions of dollars into low-income and economically disadvantaged communities around the country to help stimulate job creation and economic development, provide affordable housing and support community facilities.