We wish to inform our investors in CCMBC Investments Ltd. (“CCMBC Investments”) of recent events that may affect you and to outline the steps we are taking in response.
Recent Events
As you are aware, CCMBC Investments runs the lending program to our Churches and Church organizations. As part of the program, we have taken in more money than required for such loans. The excess funds received over and above CCMBC Investments’ lending needs are managed by a portfolio manager, Capstone Asset Management Inc. (“Capstone”), engaged by CCMBC Investments to provide portfolio management services. Capstone has invested such excess funds in different funds, including what are commonly known as “funds of funds”, namely investment funds that invest in other investment funds.
We were recently informed by Capstone that CCMBC Investments will experience a December 2025 write-down in three of these underlying funds, totaling $8.9 million.
We estimate that these adjustments will result in year end 2025 negative net unrestricted assets of approximately $5.6 million for CCMBC Investments. In other words, our total obligation of $114 million under the Notes exceeds the value of our assets by $5.6 million, or 4.9%.
Implications and Actions Taken
- Temporary pause on new investments
CCMBC Investments will not accept new investments until an updated offering memorandum for CCMBC Investments is prepared in accordance with securities laws. We anticipate this occurring in a few months to give us time to develop a plan to address the decreased net asset values in the investments managed by Capstone. The offering memorandum includes important disclosures, including investment risks and audited financial statements. - Promissory Note repayment requests remain available
CCMBC Investments continues to accept repayment requests by holders of promissory notes (“Notes”) in the normal course and intends to satisfy such requests within 45 days, in accordance with the terms outlined in our most recently filed offering memorandum and the Terms and Conditions of the Notes. It is our expectation that regularly scheduled RRIF and recurring payments will continue as scheduled. - Interest continues to accrue
Interest on Notes continues to compound and accrue at the face value of the Notes and remains payable semi annually on December 31 and June 30, the same as it always has done. - Liquidity remains strong, and we are monitoring closely
We are closely monitoring repayment requests and regularly updating our board of directors on liquidity. We currently hold more than enough readily available funds to pay requests of repayment of the Notes at normal levels. Provided repayment requests remain within normal ranges, operations will continue as usual - investors will continue to have access to their funds, and we will continue to fund Mennonite Brethren Churches and Church organizations. If repayment requests become unusually high, we may need to limit repayment requests on a pro rata basis or other equitable basis. - Work underway to restore net asset position
We have begun developing a plan to address the net asset deficiencies at CCMBC Investments. Components of that plan include the sale of surplus capital assets, cost containment measures, and a review of ancillary services. While the affected Capstone funds may recover value in future quarters, we are not basing our plan on that possibility. To be clear, while our goal is to restore our investments back to the levels prior to the write-downs, this may take time and it will require patience by stakeholders. - Engagement of professional advisors
Our external advisors have been informed of these developments and are providing guidance on our response and plan.
Commentary
This communication is intended to inform all stakeholders and provide investors adequate time to make informed decisions. While CCMBC Investments is not required to proactively send this communication, we believe it is our moral responsibility to communicate clearly with our stakeholders. Our third value states: “We steward resources on God’s behalf. We exercise care and integrity as we oversee the funds and ministry assets entrusted to us. We demonstrate accountability and transparency in our reporting, policies, and actions.”
Although periodic losses can occur within any investment portfolio, we recognize the significance of these developments and the importance of capital preservation. In 2025, we proactively initiated an asset allocation study with a third party consultant and implemented a capital adequacy policy to support long term financial stability. The study and the capital adequacy policy will help inform our strategic plan in connection with the write-downs described above.
As we navigate the complexity of these interrelated matters, we ask for your prayers. Our first value reminds us that: “We operate in dependence on God. We live in prayerful and obedient attentiveness to God - Father, Son, and Holy Spirit. We seek to glorify His name.” May He guide our next steps.
To maintain consistency in communication, all questions should be directed to Jason Krueger, CEO (This email address is being protected from spambots. You need JavaScript enabled to view it.).
Jason Krueger, CFA
CEO, CCMBC Legacy Fund Inc. and CCMBC Investments Ltd.
Cory Regier
Board Chair, CCMBC Legacy Fund Inc. and CCMBC Investments Ltd.
