On November 7, 2023, Idaho Central Credit Union successfully completed a private placement of $80.0 million of subordinated notes in one of the largest single issuances of subordinated debt by a credit union.
The subordinated notes are intended to qualify as subordinated debt under NCUA rules and are considered regulatory capital in the calculation of Idaho Central Credit Union’s net worth ratio and risk-based capital ratio.
Since January 1, 2022, newly effective NCUA rules have expanded credit union access to regulatory capital by permitting credit unions with at least $500 million in assets and new credit unions to issue subordinated debt. Low-income designated credit unions (regardless of their asset size) are also permitted to issue subordinated debt. Luse Gorman has prepared a memorandum summarizing the new NCUA rules.