Central 1 Credit Union

Central 1 Credit Union

September 22, 2011 17:00 ET

Central 1 to Issue Capital Call on Class A Member Credit Unions

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Sept. 22, 2011) - Central 1 Credit Union ("Central 1") today announced that its board of directors has authorized a call for capital from its Class A member credit unions.

Under the call, each Class A member will be required to increase its holdings of Class A shares to an amount equal to 38 basis points of that member's consolidated assets as of the end of the member's last fiscal year. The current requirement is set at 24 basis points.

It is expected that the call will formally be made on or before October 31, 2011, and will raise proceeds of approximately $100 million. These proceeds will qualify as Tier 1 regulatory capital and will be used by Central 1 for general corporate purposes.

Over the past several months, financial markets have been especially volatile, particularly given the issues facing the European Union and the impact that those issues are having on North American markets. The volatility has created some mark-to-market losses on Central 1's balance sheet, which is primarily composed of financial instruments, consisting largely of Government of Canada bonds and guarantees, provincial government debt and senior Canadian bank debt.

While Central 1's capital position is already strong and well within regulatory limits, the board of directors has determined that it is appropriate to increase Central 1's internal capital targets as a prudent measure, based on this volatility and the likelihood it will continue for the foreseeable future. The capital call is intended to ensure Central 1 is able to meet revised internal capital targets and maintain a strong capital position.

About Central 1

Central 1 has 45 Class A members in B.C. and 116 Class A members in Ontario. At year-end 2010, their combined assets amounted to $72.6 billion.

Central 1 is the central financial facility and trade association for the B.C. and Ontario credit union systems, providing liquidity management, payments, Internet banking and trade association services to member credit unions, and banking and transaction services to customers in the corporate and public sectors. For more information, visit www.central1.com.

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