A consortium of credit unions, led by the $875 million Jefferson Financial FCU of Metairie, La., funded a $112.6 million loan guaranteed through the USDA Rural Development Biorefinery, Renewable Chemical and Bio based Product Manufacturing Assistance Program. The loan, which closed last month, is the largest to date for the USDA program, which assists in the development, construction and retrofitting of new and emerging technologies for advanced biofuels, renewable chemicals and bio based products.
CU Capital Market Solutions (CMS), an Atlanta-based CUSO, was the lead loan participation agent for the deal. The loan will be serviced by Greater Commercial Lending, a CUSO owned by the $825 million Greater Nevada Credit Union of Carson City, Nev.
The loan recipient, Ryze Renewables Reno, LLC, will use the funds to convert distiller’s corn oil from ethanol plants into renewable diesel fuel. The loan will fund a new plant that is scheduled to open in the second quarter of 2019 and will create almost 70 jobs in the Silver State.
“This loan would not have been funded without participation from credit unions,” said Greater Commercial Lending EVP Jeremy Gilpin. He added that CMS Senior Managing Director Bill Mullally coordinated all loan participation participants and the CUSO’s involvement was key to the deal. Gilpin and Mullally have worked together for nearly three years to build credit union involvement in USDA guaranteed loan programs.
Mullally said Ryze Renewables has two more USDA guaranteed loans available for participation this year, and as many as six other loans from other USDA guaranteed borrowers will be looking for credit union lenders.
“These loans are an excellent asset for credit unions, with a prime plus 7% adjustable rate” Mullally said. “And, they create jobs and support small businesses, an excellent way for credit unions to fulfill their mission while managing the concentration risk that comes with serving limited fields of membership.”