POLICE CREDIT UNION SEEKS $110 MILLION FROM PRIVATE DEFERRED SHARE OFFER
Proceeds to fund continued expansion of operations and improve technology
THE Jamaica Police Cooperative Credit Union (JPCCU) is seeking to raise $110 million in capital through a recent private deferred share offer, or structured financial arrangement, with its members.
The deal, which includes an option to upsize by some 50 per cent, was arranged by lead brokers Moneymasters Limited and seeks to build wealth for members [majority of whom are police officers] of the credit union and other cooperatives. The deal boasts an attractive fixed interest rate of seven per cent over the 63-month [five years and three months] life of the instrument which matures on March 15, 2026 and is set to open on December 15, with the closure expected on January 26, 2021.
President and chief executive officer (CEO) of Money Masters, Claudette Crooks, during a launch event held last Thursday, endorsed the issue of shares as a very attractive offer available to all members of the police force, especially now when the value of essential workers and their families is being recognised globally.
“Dividends as we commonly know it, or interest/coupon, is payable every three months, so it’s very good for people who are retired or need a constant cash flow. Every 90 days there will be a cash flow payment from the payment agent, who is the Jamaica Stock Exchange (JSE) Trustee Services. Therefore the JPCCU will simply fund a particular account at the Jamaica Central Securities Depository [JCSD], who will in turn make the payments to each person’s account,” she said in outlining the details of the deal, noting the first dividend payment as being due on March 15 next year.
The use of proceeds from the issue is expected to fund technological upgrades for the entity as it seeks to stay relevant and effectively operate in a fast-changing, digitally charged environment. Part proceeds will also be allocated to support working capital needs and provide the required liquidity and capital support in line with the organisation’s projected growth — thus providing members with a larger pool of funds from which to borrow to fund personal expenses.
Interested individuals are asked to complete an application form which will be sent to all members, and afterwards contact a JPCCU branch or the lead brokers to have their requests processed.
Wray Palmer, general manager of JPCCU, said the institution represents one of the strongest within the credit union movement, possessing a membership of some 23,000 persons, $6.8 billion in assets and a $5.2-billion loan portfolio with an enviable 2 per cent delinquency rate.
“Over the last five years profitability has remained strong and consistent. Revenues have grown 59 per cent, moving from $446.4 million in 2015 to $709.7 million at the end of December 2019, while surplus has increased by 282 per cent over the same period,” he said.
Palmer added that, “despite the impact of COVID-19 the credit union continues to perform well, posting net surplus of $76.9 million for the ten months ended October 31. Given our track record we believe that the growth of the credit union will continue into the foreseeable future”.
He said that the deferred share offer will provide an attractive investment opportunity— one that will benefit members and the institution.
The JPCCU in its 65 years of existence has maintained organic growth and is today ranked 8th out of the 25 credit unions in the country. With operations across 11 locations islandwide, the entity has remained committed to its mandate of providing financial services to members and their families.