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CU System
Fitch announces ratings for U.S. Central
NEW YORK (5/14/10)--Fitch Ratings affirmed the long- and short-term Issuer Default Ratings (IDR) for U.S. Central FCU (USC) at “AA” (very high credit quality) and “F1+” (highest short-term credit quality), respectively. Fitch also has removed USC’s Individual Rating of “F” (default or would have defaulted without external support) and assigned new Individual rating of “E” (a bank with very serious problems, which requires or is likely to require external support). The rating outlook is stable (Business Wire via MarketWatch May 13). The affirmation of the IDRs is based on the National Credit Union Administration’s (NCUA) continued support of USC while the company operates under NCUA conservatorship. Fitch said NCUA will continue to support the ongoing operations of USC to maintain the stability of the corporate credit union system. To that end, NCUA is developing a plan to remove roughly $50 billion of problem securities from the corporate credit union system, much of which will be lifted out of USC. USC’s IDRs reflect the company's current support rating of “1” (a bank for which there is an extremely high probability of external support) and the support floor of “AA,” which Fitch still considers appropriate at this time. Given that USC’s long-term IDR is at its support floor, the Rating Outlook is stable. However, Fitch said a restructuring of the corporate credit union network could lessen the support provided to USC in the future. Fitch said that USC will continue to benefit from government support throughout the planned restructuring of the corporate credit union network and the implementation of new corporate credit union regulations. The removal of the “F” Individual rating (assigned Feb. 2, 2009) reflects the temporary nature of the rating, which is assigned to signify a company that has defaulted or, in Fitch’s opinion, would have defaulted if it had not received external support. USC was placed under conservatorship on March 23, 2009. The assignment of the “E” Individual rating is Fitch’s reassessment of the company on a standalone basis and reflects that the company continues to operate under NCUA conservatorship and with substantial external support.


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