American Red Cross Case Study

05.09.17

Not-for-profit humanitarian organization utilizes long-term, fixed-rate debt

The American National Red Cross shelters and feeds disaster victims, supplies approximately 40 percent of the blood used for medical care in the U.S., teaches life-saving skills across the country, and supports U.S. military members and their families. Since 1881, the Red Cross has been one of the nation’s premier humanitarian organizations, dedicated to providing care for those in need.

In April 2013, Prudential Capital Group implemented a $125 million Pru-Shelf Facility (a private, medium-term note facility) for the Red Cross to help reduce the charity’s operating risk over time. The Red Cross utilized $100 million of fixed-rate notes under the Pru-Shelf Facility to help consummate the transaction. As a result, the Red Cross was able to swap the volatility of a portion of its future obligations for the certainty of long-term, fixed-rate debt.

A financing partner of the Red Cross since 2004, Prudential Capital was chosen by the Red Cross as its lead capital provider due to Prudential Capital's relationship-focused approach to lending, certainty of execution and flexibility of financing structures.