Credit unions turn to stock market
A group of more than 30 mid-sized or smaller credit unions is planning to raise capital from beyond their traditional membership base, via the Australian Stock Exchange. Credit unions are considering the creation of a special purpose listed trust that would raise between $150 million and $200 million in capital in the form of perpetual preference shares. The trust in turn would distribute franked dividends to investors. The goal of the credit unions is to raise “tier one” or core equity capital in a manner consistent with the mutual principles of credit unions. At this stage the proponents envisage that the credit unions would raise the capital from existing credit union members and staff with a minority of capital contributed by wholesale investors such as industry superannuation funds. Maritime Workers of Australia Credit Union is one of the sponsors of the idea.