Central 1 Credit Union plans a domestic offering of $150 million of 4% Series 2 Subordinated Notes due 2019, the organization said Tuesday.

Interest on the notes is payable semi-annually at a fixed rate of 4% from the date of issue to, but excluding, Oct. 9, 2014, and at a floating rate equal to the rate on 90-day Bankers’ Acceptances plus 2.40% (paid quarterly) thereafter to maturity on Oct. 9, 2019.

Central 1, at its option, with the prior approval of the Office of the Superintendent of Financial Institutions and the Financial Institutions Commission of British Columbia, may redeem the Notes, in whole or in part. If redeemed prior to Oct. 9, 2014, the redemption price will be the greater of the “Canada Yield Price” and par plus accrued and unpaid interest.

On or after Oct. 9, 2014, the Notes are redeemable at par plus accrued and unpaid interest. The “Canada Yield Price” is the price that would provide a yield from the redemption date to Oct. 9, 2014 equal to the yield that a non-callable issue of Government of Canada bonds would carry from the redemption date to Oct. 9, 2014 plus 0.39%.

The transaction is expected to close on October 9, and the net proceeds will be used by Central 1 for regulatory capital purposes and for general corporate purposes including the potential acquisition by Central 1 of an approximate 27% interest in The CUMIS Group Ltd., as previously announced by Central 1.

CIBC World Markets Inc. and RBC Capital Markets are the co-lead agents for the offering in a syndicate that includes TD Securities Inc.

IE