Lafayette Square Secures $65 Million in Private Placement with Investment-Grade Senior Notes

Lafayette Square has successfully completed a $65 million private placement of senior notes to qualified institutional investors, marking a significant milestone for the private credit firm focused on working-class communities. The senior notes carry a 7.00% fixed interest rate and mature on August 19, 2030, providing the company with substantial capital to further its mission-driven lending initiatives. This transaction follows closely on the heels of Morningstar DBRS awarding Lafayette Square USA, Inc. a Long-Term Issuer Rating and Long-Term Senior Debt credit rating of BBB (low) with a Stable Trend, reflecting the firm's strong operating performance and conservative financial management.

The credit rating agency's assessment, detailed in their comprehensive report available at https://dbrs.morningstar.com/research/457729/morningstar-dbrs-assigns-lafayette-square-usa-inc-long-term-credit-ratings-of-bbb-low-with-a-stable-trend, highlights Lafayette Square's improved profitability, strong dividend coverage, and consistent credit performance over time. The firm's diversified portfolio, enhanced managerial assistance through its Worker Solutions platform, data-driven origination strategies, and diligent underwriting approach contributed significantly to achieving this investment-grade rating. This rating validation was crucial in attracting institutional investors to the private placement, demonstrating market confidence in the company's unique business model.

Goldman Sachs served as the lead placement agent for the transaction, with Raymond James and Keefe, Bruyette & Woods, A Stifel Company acting as co-placement agents, indicating strong institutional support for the offering. The successful placement underscores growing institutional interest in investment opportunities that combine financial returns with positive social impact in underserved communities. Damien Dwin, Founder and CEO of Lafayette Square, emphasized that this transaction represents continued institutional investor interest in working-class people and places, with shareholders benefiting from the diversification presented by this new capital alongside existing low-cost liabilities from the U.S. Small Business Administration.

The timing of this capital raise is particularly noteworthy, coming shortly after the company's second quarter earnings release on August 2, 2025, which included detailed financial and performance information filed through its Form 10-Q and Form 8-K with accompanying results presentation. This $65 million infusion of capital will enable Lafayette Square to accelerate its lending activities to middle market companies in working-class areas, supporting its ambitious goals of supporting 100,000 working-class jobs, investing 50% of capital in working-class places, and curating benefits for 50% of its portfolio by 2030. The transaction represents a significant step forward in demonstrating that mission-driven investing can attract substantial institutional capital while maintaining rigorous financial discipline and credit standards.