A group of credit unions and building societies has completed a subordinated debt issue that will provide funding for all 17 mutuals in the group. The pricing of the Australian Mutual Investment Trust's Series A Notes, which was announced yesterday, is the culmination of more than a year's work on the project.Australian Mutual Investment Trust is a co-operative funding structure put together by the Australian Mutual Group, which represents the 17 mutuals. The Australian Prudential Regulation Authority approved the trust in September.The Series A Notes were sold in two tranches: A$30 million of senior notes, priced at 390 basis points over the bank bill swap rate; and $27 million of junior notes, priced at 535 basis points over swap.The senior notes have an expected rating of A3 from Moody's, while the junior notes are unrated.There are nine investors, including three mutuals, an industry superannuation fund and five fund managers.AMIT will use $46 million of the funds to retire securities issued by the group in 2006. The $17 million balance will be used as a funding source.The chief executive of the Maritime, Mining and Power Credit Union, Mark Genovese, who is the convenor of the Australian Mutual Group, said AMIT would be used for a range of funding options, including senior debt and, possibly, covered bonds.Genovese said the notes qualified under the transitional Basel rules but will not qualify as capital under Basel III rules. Under Basel III, regulatory capital must be convertible into equity to absorb loss. This is not possible with mutuals because they do not issue equity capital.Genovese said the mutual sector was working with APRA on a solution to this problem.Westpac Institutional Bank acted as sole lead manager on the transaction.