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LIQUIDITY SERVICES
SunCorp was chartered to be a source of
liquidity for our member/owner credit unions. Like your credit
union, we exist to be a low-cost source of liquidity for our members.
Over the years, SunCorp has become the liquidity provider of choice
for credit unions, offering loans of all types and terms, from overnight
settlement loans to term loans of several years with fixed or variable
rates.
SunCorp maintains vast stores of available credit to meet the borrowing
needs of our members. With access to the world's commercial paper
markets, the NCUA's Central Liquidity Facility, and lines of credit at U.S.
Central Credit Union, SunCorp stands ready to meet the needs of
your institution in times of tight liquidity.
Below is a brief description of some of the liquidity solutions available
to your credit union. In order to take advantage of SunCorp's loan
products, your credit union will first establish a line of credit.
It's very easy, and in most instances, this can be established in
one business day. Remember that we can also custom design a credit
vehicle to meet your unique needs. Call us at 877.786.2677 or send
us an e-mail
to find out more.
Credit Union Service Organization
(CUSO) Liquidity Services
SunCorp offers liquidity services to CUSO's. Many of the following
loan products are available to CUSO's. A CUSO's line of credit is
typically guaranteed by the founding member(s) of the organization.
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Loan Types
Settlement/Overdraft
Loan
A Settlement/Overdraft Loan consists of overnight liquidity to cover
unforeseen charges from item processing and auto settlement files.
Through a settlement loan, SunCorp automatically creates a loan
for credit unions providing security to members that settlements
will be paid in a timely manner without incident. The loan occurs
after all daily settlement transactions have been posted to the
Cash Management Account. The Settlement/Overdraft Loan is open-ended
and has a floating rate.
Demand Loan
Whether your needs are long- or short-term, this loan is created
at the "demand" of your credit union. It only takes one
call to advance funds for an open-ended period of time. Drawn against
an existing line of credit and bearing a lower interest variable-rate
than the Settlement/Overdraft Loan, the Demand Loan enables members
to decrease borrowing costs and effectively manage their liquidity
position. The rate charged on the Demand Loan adjusts daily.
Collateralized
Loan
Members holding either eligible marketable securities or
SunCorp certificates can reduce their borrowing costs through our
Collateralized Loan. Like the Demand Loan, the Collateralized Loan
is a floating rate and open-ended. A Collateralized Loan backed
by pledged securities or certificates does not count against the
member's line of credit
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Term Loan
Term loans are typically made for a specific purpose
and an agreed upon term. The rate and term of a Term Loan is determined
at the time of the advance with interest payments due monthly and
principal due at maturity (unless paid prior to maturity). Term
Loans are available for a variety of maturities and are drawn against
an existing line of credit. Term Loans are subject to market based,
pre-payment penalties if paid off prior to maturity.
Certificate Loan
Your investments at SunCorp give you double the benefits: loan collateral
and great rates. Credit unions can use SunCorp certificates as collateral
on a loan, and in turn, provide your credit union with a lower cost
of funds. This fixed rate loan has a term that doesn't exceed the
maturity of the certificate and the rate is set at the time of advance.
Securities Loan
Members willing to pledge marketable securities held in safekeeping
with SunCorp may obtain a Securities Loan. The rate can be fixed
or variable and is determined at the time of advance. These loans
are extended with a set maturity date and typically are not paid
down until that date. However, the loan may be paid off early at
a credit union's request subject to potential pre-payment fees.
The advance amount will not be applied against a line of credit
and cannot exceed 98% of the market value of the pledged securities.
This is evaluated monthly to ensure proper loan to value.
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Callable Loan
A Callable Loan is a fixed rate borrowing collateralized by either
SunCorp certificates or eligible marketable securities. The credit
union is able to pre-pay the loan at agreed upon call date(s) without
penalty.
Reverse Repurchase
Loan
Through a Reverse Repurchase Loan, a credit union may sell a security
with the simultaneous agreement to repurchase the same security
on a certain date in the future at a predetermined price. Ownership
of a security involved in a reverse repurchase transaction does
not change. This assures peace of mind to your credit union that
is still entitled to all principal and interest payments on payment
dates. Maturity terms and rates are determined at the time the repurchase
agreement is entered and loans may not be paid off early as they
are matched in the market with set repurchase dates. Reverse Repurchase
Loans are not applied against your credit union's line of credit,
but must not exceed the dollar amount of securities safe kept with
SunCorp.
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Central Liquidity Facility
Loan (CLF)
As a member of the Central Liquidity Facility (founded by the NCUA
in 1979), SunCorp can offer CLF loans as a last resort. The CLF
loan enables SunCorp to continue providing the necessary liquidity
to credit unions when funds are not available from traditional sources.
Three forms of liquidity are available to credit unions including
short-term adjustment credit (30-90 days), seasonal credit (91-270
days) and protracted adjustment credits (1 - 4 years) for unusual
or emergency circumstances.
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Please send me more information
on SunCorp's liquidity products
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