Central 1 to return $50 million of capital to members
VANCOUVER, BC (September 11, 2017) — Central 1 Credit Union (Central 1) today announced that its Board of Directors approved the distribution of $50 million to members by way of a redemption of Class A shares, a redemption of Class E shares and a dividend on its Class A shares.
On August 24, 2017, Central 1’s regulator, the British Columbia Financial Institutions Commission (FICOM), amended Central 1’s borrowing multiple requirement to no more than 17.0:1 for the Mandatory Liquidity Pool (MLP) segment, and no more than 15.0:1 for the Wholesale Financial Services (WFS) segment. As a result, Central 1 is able to reduce the amount of capital it holds and return capital to members while remaining well within regulatory requirements.
“We’re focussed on serving the needs of our members while prudently managing risk,” says Brent Clode, Chief Investment Officer of Central 1. “These regulatory changes reflect Central 1’s capital and risk management capabilities and good relationship with our regulator. We are very pleased to provide this benefit to our Class A shareholders.”
On September 8, 2017, Central 1’s Board of Directors approved the following, on or before September 30, 2017:
- a redemption of $30 million of Class A shares at a redemption value of $1 per share;
- a dividend declared on the Class A shares in the aggregate amount of $5 million; and
- a redemption of 150,000 Class E shares at a redemption value of $100 per share.
On April 28, 2017, Central 1’s members approved amendments to its rules creating Class F Shares. If these rule amendments are approved by FICOM, Central 1 intends to issue Class F shares, the proceeds of which will be used to capitalize the MLP. Management anticipates that, subject to approval by Central 1’s Board of Directors, Central 1 will redeem additional Class E shares following the initial issuance of Class F shares.
Caution Regarding Forward-Looking Statements
This press release contains forward-looking statements based on assumptions, uncertainties and management’s best estimates of future events. These include, without limitation, statements contain the words “may”, “will” “intends” and “anticipates” and other similar words and expressions. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made. Actual results may differ materially from those currently anticipated. Securityholders are cautioned that such forward-looking statements involve risks and uncertainties. Certain important assumptions by Central 1 in making forward-looking statements include, but are not limited to, availability of funds, economic conditions and regulatory approvals. Important risk factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include economic risks, regulatory risks and other risks detailed from time to time in Central 1’s periodic reports filed with securities regulators. Given these risks, the reader is cautioned not to place undue reliance on forward-looking statements. Central 1 undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable laws.
About Central 1 Credit Union
Central 1 Credit Union (‘Central 1’) cooperatively empowers credit unions and other financial institutions who deliver banking choice to Canadians. With assets of $11.9 billion as of December 31, 2022, Central 1 provides critical services at scale to enable a thriving credit union system. We do this by collaborating with our clients, developing strategies, products, and services to support the financial well-being of their more than 5 million diverse customers in communities across Canada.
For more information, visit central1.com.