"This document presents the Senior Subordinated Security (Note*) issued by a participating Credit Union to an Investor.

Conclusion:  The terms and conditions of the Note reflect the terms and conditions of the Program presented in the Agreement.  The Note terms and conditions are also consistent and not in conflict with the requirements for secondary capital found in applicable rules of the National Credit Union Administration (NCUA) at 12 C.F.R. Section 701.34.  Consequently, a low-income designated, CDFI qualified federal credit union may issue the Note.

This review does not indicate or endorse participation in the Program by a low-income, CDFI certified federal credit union.  Each credit union seeking to participate in the Program should carefully review the requirements of the Program with competent counsel before undertaking the obligations attendant to participation.  

Analysis:  The Note is cast as an 8-year or 13-year obligation bearing interest at two (2%) percent, per annum until the eighth anniversary of the date and for 13-year Notes, at nine (9%)  percent per annum until maturity after the eighth anniversary of the date of issuance, payable quarterly in arrears on February 15, May 15, August 15 and November 15 of each year.  The Note may be prepaid at any time [See, Section 6.10 of the Agreement]. The Note is not an insured deposit in a federal credit union insured by the National Credit Union Share Insurance Fund.  The Note to the extent provided in the Agreement, is subordinate and junior in right of payment to all deposit liabilities of the Credit Union and to the Credit Union’s debt obligations to its general and secured creditors, except under limited circumstances, as required by applicable rules of the NCUA and the Federal Credit Union Act, 12 U.S.C. Section 1751 et seq.

We are providing this analysis to you for your use in evaluating the Program.  The analysis is based on the form of the document presented by you.  We have not verified nor been ask to verify the form or substance of the document with any person or entity responsible for its preparation.  Our review has been limited to the analysis of the Note under the requirements of federal credit union law as it applies to a low-income designated, CDFI certified federal credit union.  We have not reviewed the Note for purposes of providing an analysis of its terms under federal or state securities law.  This analysis is intended for your use and may not be relied upon by other without our express consent.  The analysis is based on the law as of the date of this communication and we are not obligated, nor have we been requested to provide you with information or a revised analysis should we become aware of changes in applicable law that may affect the discussion and analysis provided to you.”
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*Note is used to describe the term Senior Subordinated Security to avoid confusion with a security which may or is subject to federal and state securities laws.