Compeer Financial, a member-owned Farm Credit cooperative, today announced the closing of its private offerings on a total of $200 million in subordinated debt to augment its capital position.
“We are pleased to announce this opportunistic capital raise to support the continued growth of our clients in agriculture and rural America,” explained Rod Hebrink, president and CEO of Compeer Financial. “Agriculture is growing after the disruptions brought on by COVID and Compeer is dedicated to ensuring we continue to provide a dependable source of credit in all environments. This favorably priced capital will help support our clients and our cooperative as we move into the future.”
This transaction includes $50 million aggregate principal amount of 2.75 percent Fixed-to-Floating Rate Subordinated Notes due 2031 and $150 million aggregate principal amount of 3.375 percent Fixed-to-Floating Rate Subordinated Notes due 2036.
Compeer intends to use the net proceeds of the offering to reduce borrowings from AgriBank and provide more capacity to support the capital needs of the organization’s clients.
“This issuance provides cost-effective, long-term capital that will benefit Compeer and its stockholders,” said Hebrink. “Taking advantage of current favorable conditions in the capital markets allows Compeer to enhance our capacity to meet the financial needs of our clients. Third-party capital supplements our member stock and unallocated retained earnings.”
Piper Sandler & Co. acted as the sole initial purchaser. The Notes are intended to qualify as Tier 2 capital for regulatory purposes.
This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities, nor shall there be any sale of the securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The securities being offered have not been approved or disapproved by any regulatory authority, nor has any such authority passed upon the accuracy or adequacy of either prospectus supplement or the shelf registration statement or prospectus relating thereto.
Any forward-looking statements are based on current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from expectations due to a number of risks and uncertainties. More information about these risks and uncertainties is contained in our 2020 Annual Report. We undertake no duty to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.