Monday, October 19, 2009

U.S. Central Raises $4 Billion

Last Thursday, I commented on NCUA Chairman Matz's testimony. In her testimony, she stated that "WesCorp and U.S. Central are preparing to utilize external sources of funding through offering issuances guaranteed by the NCUSIF for terms of two to three years."

Well, last Wednesday U.S. Central tapped the capital markets and raised $4 billion through a public offering of medium-term notes. The offering was guaranteed through NCUA’s Temporary Corporate CU Liquidity Guarantee Program. The offering included a combination of a two-year floater ($500 million at three-month LIBOR + 0); two-year fixed ($1.5 billion at swaps + 0); and three-year fixed ($2 billion at swaps + 5).

An interesting commentary on the U.S. Central debt issuance can be found at Unrealized Losses blog. According to the blog, investors received a better yield than credit unions that have invested in CDs issued by corporate credit unions.

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