Friday, July 13, 2018

Subordinated Debt at LICUs Up 57 Percent, Since the End of 2016

Since the end of 2016, subordinated debt counting as net worth has increased by almost 57 percent or $84.4 million.

As of March 2018, total subordinated debt placed with low-income credit unions (LICUs) was $232.8 million. This is up from $148.4 million at the end of 2016.

A number of large LICUs have issued subordinated debt (the dollar amount in parentheses) since the end of 2016, including Advia Credit Union ($5 million), Self-Help Credit Union ($13 million), Self-Help FCU ($5 million), Carter FCU ($6 million), Jefferson Financial FCU ($11,597), and Notre Dame FCU ($12 million).

Carter FCU's issuance of subordinated debt was partially used to repurchase subordinated debt issued from the U.S. Treasury Department as part of the Community Development Capital Initiative.

The following table lists the 10 LICUs holding the most subordinated debt as of March 31, 2018.

It is my belief that this trend of large LICUs issuing subordinated debt will continue.

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