Debt Certificates Payable |
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| Debt Certificates Payable | Note 11. Debt Certificates Payable The table below provides information on the Company’s debt certificates payable (dollars in thousands):
Future maturities for the Company’s debt certificates during the twelve-month periods ending December 31, are as follows (dollars in thousands):
Debt issuance costs related to the Company’s debt certificates payable were $72 thousand and $88 thousand at December 31, 2025 and December 31, 2024, respectively. The debt certificates are payable to investors who have purchased the securities. Debt certificates pay interest at stated spreads over an index rate. The investor may reinvest the interest or have the interest paid to them at their option. The Company may repurchase all or a portion of debt certificates at any time at its sole discretion. In addition, the Company may allow investors to redeem their debt certificates prior to maturity at its sole discretion. SEC Registered Public Offerings Class 1A Offering In February 2018, the Company launched its Class 1A Notes Offering. Pursuant to a Registration Statement declared effective on February 27, 2018, the Company registered $90 million of its Class 1A Notes in two series – fixed and variable debt certificates. The Class 1A Notes are unsecured. The interest rate paid on the Fixed Series Notes is determined in reference to a Constant Maturity Treasury Index published by the U.S. Department of Treasury (“CMT Index”) in effect on the date that the note is issued plus a rate spread as described in the Company’s Class 1A Prospectus. The variable index in effect on the date the interest rate is set determines the interest rate paid on a Variable Series Note. The CMT Index refers to the Constant Maturity Treasury rates published by the U.S. Department of Treasury for actively traded Treasury securities. The variable index is equal to the 3-month LIBOR rate. The Company issued the Class 1A Notes under a Trust Indenture entered into between the Company and U.S. Bank. As of December 31, 2025, there were no Class 1A Notes outstanding. 2021 Class A Offering In January 2021, the Company launched its 2021 Class A Notes Offering. Pursuant to a Registration Statement declared effective on January 8, 2021, the Company registered $125 million of its 2021 Class A Notes in two series – fixed and variable debt certificates. The 2021 Class A Notes are unsecured. Like the Class 1A Notes Offering, the interest rate paid on the Fixed Series Notes is determined in reference to a CMT Index published by the U.S. Department of Treasury in effect on the date that the note is issued plus a rate spread as described in the Company’s 2021 Class A Prospectus. The variable index in effect on the date the interest rate is set determines the interest rate paid on a Variable Series Note. The CMT Index refers to the Constant Maturity Treasury rates published by the U.S. Department of Treasury for actively traded Treasury securities. The variable index is equal to the Secured Overnight Financing Rate (“SOFR”) for three-month financial obligations. The Company issued the 2021 Class A Notes under a Trust Indenture entered into by and between the Company and U.S. Bank. 2024 Class A Offering In February 2024, the Company launched its 2024 Class A Debt Certificates Offering. Pursuant to a Registration Statement declared effective on February 5, 2024, the Company registered $200 million of its 2024 Class A Debt Certificates in two series – fixed and variable debt certificates. The 2024 Class A Debt Certificates are unsecured. The interest rate paid on the Fixed Series Debt Certificates is determined in reference to a CMT Index published by the U.S. Department of Treasury in effect as of the first business day of the month in which the note is issued plus a rate spread as described in the Company’s 2024 Class A Prospectus. The CMT Index refers to the Constant Maturity Treasury rates published by the U.S. Department of Treasury for actively traded Treasury securities. The variable index in effect on the date the interest rate is set determines the interest rate paid on a Variable Series Debt Certificate. The variable index is equal to the SOFR for three-month financial obligations. The Company issued the 2024 Class A Debt Certificates under a Trust Indenture entered into between the Company and U.S. Bank. Private Offerings Series 1 Subordinated Capital Notes (“Subordinated Notes”) In June 2018, the Company renewed the offer and sale of its Subordinated Notes initially launched in February 2013. The Company offers the debt certificates pursuant to a limited private offering to qualified investors that meet the requirements of Rule 506 of Regulation D. The Company offers the Subordinated Notes with maturity terms from to months at an interest rate fixed on the date of issuance, as determined by the then current -day average rate reported by the U.S. Federal Reserve Board for interest rate swaps. Under the Subordinated Notes offering, the Company is subject to certain covenants, including limitations on restricted payments, limitations on the amount of debt certificates that it can sell, restrictions on mergers and acquisitions, and proper maintenance of books and records. The Company was in compliance with these covenants at December 31, 2025 and December 31, 2024. |
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