NORTH LIBERTY, Iowa—GreenState Credit Union is reporting it has completed its private placement of $100 million of fixed-to-floating rate “Social Subordinated Notes.”
The $11.3-billion GreenState said it issued the Social Subordinated Notes in accordance with the GreenState Social Financing Framework, which allocates an amount equivalent to the net proceeds of the offering to support the credit union’s Minority Homeownership Initiative, which it said is designed to close Iowa’s racial homeownership gap.
According to GreenState CU, the notes pay a fixed annual rate of 7.75% for the first five years and will reset quarterly thereafter to what is expected to be the then current three-month SOFR rate plus 436 basis points.
The Social Subordinated Notes have been assigned an investment grade rating of BBB- by the Kroll Bond Rating Agency, Inc.
S&P Global Ratings, a leading global independent provider of environmental, social and governance (ESG) research and ratings, has reviewed and verified that GreenState’s Social Financing Framework is consistent with the current Social Bond Principles, as published by the International Capital Market Association, according to the credit union.
Placement Supports Homeownership Objective
“We are pleased to announce the completion of the first offering of credit union subordinated debt that adheres to social bond principles,” said CEO Jeff Disterhoft. “The offering supports our credit union’s objective to contribute meaningfully toward reducing the racial homeownership gap in Iowa and across the Midwest by funding at least $1 billion in mortgage loans to minority borrowers by the end of 2031. We appreciate the strong support of the investor community for a project which will have such a positive social impact across our communities. We hope that this initiative and the related bond issuance will provide a model that inspires other financial institutions to join this important effort.”
Advisory Services Provided
GreenState reported Olden Lane Securities, LLC advised it on the transaction’s structure and regulatory affairs.
“GreenState has been a leader in credit union subordinated debt since its first offering in 2020,” said Olden Lane CEO Michael Macchiarola. “We are thrilled to have been a part of their latest innovative offering and expect it will serve the industry more broadly by drawing attention of ESG conscious investors to the important role credit unions play in community and social finance.”
Olden Lane served as co-placement agent with Stifel Nicolaus & Co. Inc. Honigman LLP served as legal counsel to GreenState and Hunton Andrews Kurth LLP served as legal counsel to the placement agents.
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