Liquidity Services

When Kentucky Corporate was established in 1982, one of our primary functions was to provide liquidity to our member credit unions. Today, this remains one of our most important functions. Kentucky Corporate offers a wide range of cost efficient ways to meet your cash flow needs.

Establishing a line of credit is an important liquidity-planning step and should be a part of every credit unionís cash management. We strive to serve membersí liquidity needs in the most flexible and convenient means possible.

Overnight Loans

An open-end line-of-credit is available to provide funds for overnight purposes and to fund short-term cash shortages. Overnight loans are priced at a spread to the federal funds rate, which is reset daily and interest is due monthly.

Term Loans

Fixed rate, fixed term loans are competitively priced and fixed at the issued date and interest is due monthly.

Share Certificate Loans

Kentucky Corporate certificates may be pledged against an overnight loan and receive a rate less than the overnight loan rate.

Reverse Repurchase and Liquidity Repurchase

For those members who safekeep securities at Kentucky Corporate, there are two additional options to allow your investments to work for you: the Reverse Repurchase and the Liquidity Repurchase Programs.

The Reverse Repurchase Program allows your credit union the opportunity to earn some additional basis point yield by borrowing against certain securities and re-investing the borrowed funds in a certificate at Kentucky Corporate at a positive spread. When the certificate matures, the loan is repaid. The Liquidity Repurchase Program works in a similar way although the funds you receive from the loan are not reinvested but placed in your overnight daily account to help you fund liquidity needs. This is another cost effective way to secure funds without having to sell a security.

Network Liquidity Acceptance Company (NLAC)

Kentucky Corporate has partnered with the Corporate Network to buy member credit union loan portfolios. This provides the credit union with a source of liquidity that enables credit unions to provide additional loans to their members. While NLAC focuses on purchasing automobile loans, they will consider other loans on a case-by-case basis. Although NLAC purchases the loans, the member credit union continues the servicing and thereby continuing the relationship with your members.

Central Liquidity Facility (CLF)

The CLF is the lender of last resort for credit unions experiencing a liquidity crisis. All Kentucky Corporate members with Membership Capital Shares have access to the CLF. The loans are made at the discretion of the CLF and all terms and conditions are determined at the time of issuance.