Last week, I cast my vote, and one of the local items I voted on was the 2020 GO Bond, which is the final installment of a four-bond package for the Charlotte community. NC Voters approved the three previous bond installments in 2014, 2016, and 2018. The 2020 bonds are targeting a total issuance of $197,232,000 as detailed below: $50 million of Affordable Housing Bonds seek to increase the supply of reasonably priced housing for low- and moderate-income residents in Charlotte. $44.5 million of Neighborhood Improvement Bonds target Charlotte’s infrastructure needs, such as streets and sidewalks, in order to enhance connectivity throughout the city. $102.732 million of Transportation Bonds pursue improvements in the city’s transport, such as transit access, bridges, trails, sidewalks, and streets. On August 7, 2019, the foundation purchased a Charlotte housing bond, which was part of the 2018 approved issuance mentioned above. As of October 31, 2020, this bond (+5.79%) was outperforming both the Bloomberg Barclays US Aggregate Bond Index (+5.41%) and Bloomberg Barclays Municipal 1 – 10 Year Blend Index (+2.78%) since inception. We classify the foundation’s Charlotte housing bond as a Mission-Related Investment provided it aligns specifically with one of the foundation’s three focus areas, Vibrant Communities. This bond has generated a positive financial return for the foundation, while also relatively outperforming, and thus has grown the corpus of the foundation, further enhancing grantmaking abilities. Additionally, buy owning this bond, the foundation is realizing the positive non-financial return of contributing to Charlotte’s affordable housing efforts. The logistics of purchasing this bond were straightforward as we utilized an existing Fixed Income manager for the foundation to buy the bond at a compelling price. The bond is custodied at one of the foundation’s main custodians, Fidelity, allowing for seamless performance reporting. Pending the approval of the 2020 bonds, the foundation will likely purchase additional housing bonds from this new issuance next year.
