After closing its first affordable housing financing cycle in California, with a 12% annual return and full repayment of interest and principal, CIX Capital returns to the international market with a new vehicle.

The Zogbi family's asset management firm, which operates in the financial market in Brazil and abroad with a focus on the real estate segment, has just launched the ESG Affordable Housing Bond II, a US$20 million international debt issuance aimed at developing affordable housing in the United States.

“The thesis has been proven. The model works, the tax credit works, and now the regulatory environment is even more consolidated,” says Carlos Balthazar , CEO of CIX Capital.

With a four-year term and a projected return of 10% per year, the new bond will finance the initial phase of real estate projects, from land acquisition, through licensing and structuring, until the developments become eligible for the Low-Income Housing Tax Credit (LIHTC), the main federal program to incentivize affordable housing in the U.S.

The rationale behind the new bond is the same as the previous one. Structured in 2022, the Affordable Housing Bond I financed more than 40 projects in 34 cities in California and enabled the construction of 2,647 affordable housing units, benefiting more than 10,000 people – the cycle ended in November 2025.

“It was our first experience with LIHTC. Today, we have technical, operational, and legal comfort. We have been closely monitoring the American legislature and have seen that, regardless of whether it's a Democratic or Republican government, support for the program has only increased,” says Balthazar.

The recent reform of LIHTC, included in the American tax reform signed into law in July 2025, has increased the predictability and scale of affordable housing projects.

According to the CEO of CIX, the program offers federal tax credits that make it economically viable to build rental properties at prices compatible with the income of low-income families, who are under pressure from inflation, high interest rates in recent years, and a growing structural deficit.

Despite all these protections, the investment is not risk-free. While it is far removed from traditional credit or default risks, the main threat is that the project may not qualify under US government regulations.

To mitigate this risk, the bond adopts diversification. The US$20 million will be allocated among 20 to 40 projects, all concentrated mainly in California.

The second is a set of cross-guarantees, with receivables from other projects of the developers serving as a buffer against potential one-off losses.

Furthermore, the model provides an exit strategy. When the project reaches the eligibility stage for LIHTC, private capital exits the operation, replaced by financing anchored in federal tax credits.

"That's what allows us to pay 10% per year, above the Treasury, with a risk that, ultimately, is also backed by the American government," says Balthazar.

The two percentage point reduction in the projected return compared to Bond 1 reflects the new level of interest rates in the US and not an increased risk of the product.

“We maintain virtually the same spread relative to the Treasury. What has changed is the yield curve, which is now lower,” says the CEO of CIX.

Investor, I'm going to California.

CIX's geographic focus remains on California, the state with the largest low-income housing deficit in the country. Today, it is estimated that there are approximately 2 million low-income families for only 700,000 affordable homes.

Despite regulatory challenges, high costs, and climate risks, such as the large forest fires of recent years, the Zogbi family's asset management firm sees the state as the most mature and predictable market for this investment thesis.

In Bond I, the asset manager financed the reconstruction of entire communities destroyed by fire, in operations supported by federal disaster relief loans.

Although California remains the primary focus, CIX is already testing geographic diversification. The first bond issue was a successful experiment in Arizona.

For 2026, the management company is studying new concepts, such as senior living , in addition to a real estate development project in Miami, now approved by the city government and being adapted to the rules of the Live Local Act, Florida legislation that offers incentives to developments with social benefits.

A year ago, CIX Capital completed a reallocation cycle of approximately US$100 million from its portfolio to focus on real estate opportunities in the US, including multifamily properties in Miami.

“Affordable housing and senior living are needs that are only going to grow. When society realizes this, it will wonder why it didn't prepare sooner,” says Balthazar.

Today, CIX Capital manages approximately R$ 3 billion in assets, operating in Brazil and the United States.

In a market still dominated by traditional fixed income, the asset manager believes that hybrid products, with competitive returns and measurable impact, should gain ground as the global interest rate cycle enters a new phase.