As a primary liquidity provider to the credit union system, Central 1 manages our portfolio to ensure we have appropriate levels of liquidity to support the system during times of stress. This ensures we are able to continually offer our programs when our members and clients need them the most.
Central 1 is here to help. We are focused on maintaining confidence in the system and committed to supporting our members and clients through this unprecedented time, ensuring the system’s resilience and success now and through the other side. That is why Central 1 took two important steps last week.
Successfully raised $150 million in market funding
To maximize Central 1’s flexibility and responsiveness to any increased credit union liquidity needs at this time, Central 1 prudently accessed the capital markets on March 30, 2020, and successfully raised $150 million in a re-opening of our recent senior deposit note.
Prior to the public health crisis and the current economic environment, Central 1 benefited from elevated system liquidity and a conscious build-up in liquidity. Our current liquidity position is strong; however, like many financial institutions at this time, we anticipate it may become strained due to the ongoing pandemic. The fundraising increases our ability react swiftly to support members and clients who are reviewing and employing liquidity strategies.
Accessing the Bank of Canada’s Commercial Paper Purchase Program
On April 2, 2020 Central 1 accessed the Bank of Canada’s recently launched Commercial Paper Purchase Program (CPPP) to support the continuous functioning of financial markets. Access to this program ensures Central 1 has a consistent and stable source of short-term market funding to support our members and clients.
The Canadian commercial paper (CP) market is a key source of short-term financing to support the ongoing needs of a wide range of firms and public authorities. CPPP will help support the flow of credit to the economy by alleviating strains in Canada’s commercial paper markets.
CPPP guarantees commercial paper funding to an amount equal to 1.25 times of the maximum program size over the past 12 months.
Our team is closely monitoring potential impacts to the credit union system and continuing to assess our access to all of the liquidity facilities recently announced by the Bank of Canada and the Canadian Mortgage and Housing Corporation. Our priority is to support your organization as you navigate these highly unusual times