Uniting Financial Services announces inaugural SDG subordinated note issue
Uniting Financial Services (UFS) announced today (6 December) the successful completion of an issue of subordinated notes to institutional investors to support investment activities in alignment with the Sustainable Development Goals. This is the first approach to the capital markets and has attracted high calibre investors.
The notes qualify as SDG Bonds due to the alignment of the UFS ethical and ESG investment process with the UN Sustainable Development Goals. UFS has issued the notes to diversify its investor base and to enhance the capital management of its balance sheet business.
Executive Director, Warren Bird, said, “Not only is this our first capital markets issue, but we understand that it’s very rare for a faith-based organisation of any denomination to undertake such a fund raising. That we’ve been able to do so is testament to the professional, prudent and profitable way that we’ve been investing the Uniting Church’s funds for many years.”
“It’s a reflection of the growing support in the funds management sector for investment processes that are grounded in the sort of ethical principles that the Uniting Church has championed for many years – investing in activities that don’t harm people’s lives or damage the environment, but contribute to a healthy and sustainable communities.”
The notes that UFS has issued have a ten year maturity, but are callable after five years; are floating rate securities that pay interest quarterly; and have been priced in the market at a margin of 3.25% over the 3 month BBSW reference rate, stepping up by an additional 0.75% if not called. UFS has raised $30 million from one cornerstone investor and other smaller parcels.
UFS is the Treasury and Investment Services arm of the Uniting Church in NSW and the ACT. Its Tier 1 capital has been contributed by the Synod in NSW & ACT, with other Uniting Church organisations holding at-call and fixed term debenture investments. UFS is strategically diversifying its investor base to include external institutions such as the fund managers who’ve supported this transaction.
“UFS is on a mission to undertake disciplined ethical investment in order to help make the world a better place. It’s exciting that we’ve been joined on that journey by the investors in our subordinated note issue”, Mr Bird said.