Positioning itself for future growth, CUNA Mutual said it has entered into an agreement with institutional investors to issue $85 million in fixed-rate, 20- year surplus notes.
CUNA Mutual said it will use this infusion of capital to support its credit union market and diversification strategies that will drive future profitable growth. The initiatives could include acquisitions and/or investment in business-to-consumer initiatives in the credit union marketplace.
"Surplus notes are a cost-effective opportunity in this low-interest environment to take advantage of our financial strength and raise new capital," said Jeff Post, president/CEO of CUNA Mutual. "The new capital increases our already strong financial position and gives us flexibility to invest in opportunities that will drive future growth."
A surplus note is a bond-like instrument issued primarily by mutual insurance companies, according to CUNA Mutual. They are debt-like in that they pay an interest rate and have a finite maturity. During that period, the company said it pays an interest rate to its investors.
