Calvert Impact’s Cut Carbon Note Program surges past $100M with institutional backing

Several large investors fully subscribed the latest $45M offering immediately

Bethesda, MD — Calvert Impact announced the closing of the third issuance of its Cut Carbon Note®, with large investments from an insurance company, two pension funds, and an advisory firm. This brings the Notes - an investment-grade fixed-income product that finances sustainability upgrades for commercial and multifamily buildings - to more than $100 million.

“We’re thrilled to see this product resonating so strongly with institutions,” said Justin Conway, chief product and partnerships officer of Calvert Impact, noting the offering was fully subscribed immediately.

“Within the past five months, we’ve doubled the Cut Carbon portfolio to $100 million and the impact continues to grow.”

Sixty percent of the projects in the Cut Carbon Note portfolio go beyond standard Commercial Property Assessed Clean Energy (C-PACE) requirements and meet the new CIRRUS Low Carbon Standard developed by PACE Equity and the New Buildings Institute. The cumulative impact is now expected to save over 206,000 metric tonnes of carbon and $69 million in energy costs over the weighted average life of portfolio projects, along with approximately 181 million gallons of lifetime water conservation.

“All of this impact is additive,” said Beau Engman, founder and president of PACE Equity, the originator of the financing to the C-PACE projects. “This means that we’ve been able to work with developers to make energy efficiency and renewable upgrades that would not have happened otherwise.”

Though this latest issuance was purchased by institutional investors, the Cut Carbon Note program has over 100 investors and is accessible to both individuals and institutions starting at $1,000 in brokerage accounts. The product is ultimately expected to grow to $400 million, and Calvert Impact plans to announce future issuances of the Cut Carbon Note in coming months. The program won the 2024 Grunin Prize for Law and Social Entrepreneurship for its innovation, impact, and scalability.

Calvert Impact Climate, Inc., a subsidiary of Calvert Impact, Inc., is the issuer of the Cut Carbon Notes.

The Notes are an asset-backed security and will be issued by and payable exclusively from the assets of Calvert Impact Climate, Inc., a special purpose vehicle. InspereX LLC serves as lead agent on the Cut Carbon Note and US Bank Trust Company serves as indenture trustee and custodian. Morgan, Lewis & Bockius LLP, Warner Norcross + Judd LLP, Husch Blackwell, and Mayer Brown serve as counsels on the program.

About PACE Equity

For over a decade PACE Equity has funded Commercial Property Assessed Clean Energy projects in innovative, never-before-seen ways, with better financing for better buildings. PACE Equity has closed C- PACE projects across the U.S. and enabled the energy efficient commercial development of over $6.3 billion while eliminating well over 1.4 million metric tons of carbon. PACE Equity offers design and support that allow customers to intelligently meet the demands of today’s consumer and tomorrow’s building requirements.