Sun | Jan 24, 2021

C&WJ credit union to list deferred shares by end-July

Published:Friday | July 10, 2020 | 12:19 AMKarena Bennett - Business Reporter
Carlton Barclay, CEO of C&WJ Cooperative Credit Union Limited.
File Carlton Barclay, CEO of C&WJ Cooperative Credit Union Limited.

In three weeks, Community & Workers of Jamaica Co-operative Credit Union Limited, C&WJCCUL, will create a first in Jamaica’s credit union history with the listing of $900 million of deferred shares on the Jamaica Stock Exchange, JSE.

The listing will allow credit union members who participated in C&WJCCUL’s private offer in June 2018 to trade their shares with non-members of the credit union.

The shares were initially to be listed in mid- to late-summer of 2019, but missed that deadline amid discussions with the Bank of Jamaica, BOJ, and the Department of Cooperatives and Friendly Societies, and pending the final nod from Industry Minister Audley Shaw, whose portfolio covers cooperatives.

Credit unions are currently being transitioned to oversight by the central bank.

The Department of Cooperatives and Friendly Societies and BOJ were said to have separately raised concerns about who could own the shares, and how the credit union would account for the shares on its books once they are listed.

Internally, C&WJCCUL also had to revise its rules to recognise the deferred share as a debt instrument, thereby negating the requirement that a deferred shareholder automatically be recognised as a member of the credit union.

“All of that has been resolved now. We have clearance from all the parties and so we are going ahead with the listing in three weeks,” said CEO of C&WJCCUL Carlton Barclay this week. He was, however, tight-lipped on the precise date the price at which the shares will be introduced to the market.

JN Fund Managers Limited will act as listing agent.

Under a listing by introduction, a company applies to the stock exchange to list shares without doing an initial public offering, or IPO, of those shares.

The current holders of the shares are advised to open a Jamaica Central Securities Depository, JCSD, account and a brokerage account with a local stock broker by July 16, if they want to trade their shares after listing.

“Failure to obtain a JCSD account number and create a brokerage account by the stipulated date will result in your shares being placed in a trust account in the name of C&WJCCUL, which will hold the shares on your behalf until such time that they can be transferred to you,” C&WJCCUL said in a notice about the pending listing.

“Note, this transfer will attract a fee,” it said.

C&WJCCUL’s deferred shares offer investors a return of 7.35 per cent fixed for 24 months on five-year and 10-year instruments.

Interest for the five-year instrument becomes variable after year two at a reset rate of two per cent plus the six-month Treasury bill yield, while the 10-year instrument offers a reset of 2.5 per cent, plus the six-month treasury rate after the end of the second year up to maturity.

The funds raised from the share issue was used by C&WJCCUL to pay back maturing deferred shares; upgrade banking software to allow for Internet banking; offer new services, including partnering with Alliance Investment on card services; and as working capital.

ePay Mastercard

As for the Alliance partnership, the credit union announced last week that it had launched its C&WJCCUL ePay Mastercard, a prepaid card linked to members’ saving accounts that facilitates online and other transactions.

The launch of the Mastercard marks a first for the local credit union movement.

C&WJCCUL has also introduced Internet banking, and a mobile app, and also now facilitates applications for loans online.

C&WJCCUL, which opened its doors in 1961 as the Jamaica Telephone Company Employees Co-operative Credit Union Limited, went through a round of eight mergers in recent years – the latest being with St Elizabeth Co-operative Credit Union Limited, SECCUL, last September – closed its last fiscal year ending December 2019 with a loan portfolio of $12.6 billion, and total assets of $17.7 billion.

It’s now said to be the largest credit union in Jamaica, with a 14 per cent share of the deposits or savings managed by the movements 25 members.

C&WJCCUL reported a surplus of $347.7 million on interest income of $1.7 billion earned by the company in 2019.