Another CUA FRN?

Readers will be familiar with Credit Union Australia (CUA) through YieldReport’s term deposits pages. Typically credit unions raise funds via term deposits and then lend those funds for home and personal loans. However, from time to time, they will go the wholesale markets for funds, which is what CUA appears to be about to do. The credit union will be meeting with Australian investors in what is likely to be the prelude to a capital raising. CUA’s last foray into the bond markets was in 2014 when it issued $50 million December 2017 FRNs at BBSW + 120bps. FRNs seem to be in vogue at the moment, perhaps due to current investor demand for floating rate instruments, which itself may be a symptom of investors’ views of interest rate movements in the medium term. CUA has a BBB+ rating from Standard & Poor’s and an A3 rating from Moody’s.