February 14, 2023
Contact: Jeff Disterhoft, President/CEO
North Liberty, Iowa (February 14, 2023) —GreenState Credit Union today announced the completion of its private placement of $100 million of fixed-to-floating rate social subordinated notes due 2033 (Social Subordinated Notes). The Social Subordinated Notes initially bear interest at 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 were assigned an investment grade rating of BBB- by the Kroll Bond Rating Agency, Inc.
GreenState 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, designed to close Iowa’s racial homeownership gap. 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.
“We are pleased to announce the completion of the first offering of credit union subordinated debt that adheres to social bond principles,” said Jeff Disterhoft, Chief Executive Officer of GreenState. “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.”
Olden Lane Securities LLC advised GreenState on the transaction’s structure and regulatory affairs. “GreenState has been a leader in credit union subordinated debt since its first offering in 2020. 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,” said Michael Macchiarola, Olden Lane’s CEO.
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. This press release is for informational purposes only and shall not constitute an offer to sell, or the solicitation of an offer to buy the Social Subordinated Notes nor shall there be any sale in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The indebtedness evidenced by the Social Subordinated Notes is not a deposit and is not insured by the National Credit Union Insurance Share Fund or any other government agency or fund. More information on GreenState’s Social Bond Framework can be found here.
About GreenState Credit Union
Headquartered in North, Liberty, Iowa, GreenState Credit Union is the country’s 19th largest credit union and is consistently one of the top-ranked credit unions for returning profits to its members in the form of better rates and lower fees. For information about GreenState, visit www.GreenState.org.
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