Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive
150x172_CUEffect.jpg
Contacts
LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

News Now

CU System
Moodys adjusts four corporates short-term ratings
MADISON, Wis. (4/16/09)--Moody’s Investors Service adjusted the short-term ratings of four corporate credit unions Tuesday to Prime-3 from Prime-1. The rating actions affected:
* Members United Corporate FCU, Warrenville, Ill.; * Central Corporate CU, Southfield, Mich.; * Corporate Central CU, Muskego, Wis.; and * SunCorp Corporate CU, Westminster, Colo.
The rating actions reflect Moody’s view that the corporates’ baseline credit assessments, a measure of their stand-alone credit profiles, have weakened. In particular, the eventual impairment of the corporates’ capital investments--member capital shares and paid-in capital--in U.S. Central FCU, and potential losses in their securities portfolios, will lead to capital ratios that are weak and would be inconsistent with an investment grade rating on a stand-alone basis, Moody’s said in a press release. However, Moody's views the probability of external support from both the U.S. government and the credit union network for the corporate credit unions to be high, resulting in significant lift to their short-term ratings, which are Prime-3. The short-term ratings also consider the senior position of debt obligations relative to member shares, which provides substantial added protection for third-party creditors. The Prime-3 ratings and developing outlooks reflect the uncertainty of potential regulatory and/or structural changes to the Corporate Credit Union Network, and the risk that such changes may diminish the relevance of these firms upon the restoration of normal market and economic conditions. In January, the National Credit Union Administration (NCUA) issued an “Advance Notice of Proposed Rulemaking” (ANPR) and request for comment. Under the ANPR, the NCUA sought public comment as to the appropriate business functions, geographic reach, capitalization, permissible investments, risk management and corporate governance of corporates. The NCUA also is considering whether there should continue to be a two-tiered corporate network, which has U.S. Central as the only wholesale credit union in the U.S. Tuesday’s rating actions are consistent with Moody’s recent announcement that it is recalibrating some of the weights and relative importance attached to certain rating factors within its current bank rating methodologies. Capital adequacy, in particular, takes on increasing importance in determining stand-alone ratings in the current environment, Moody’s said.
Other Resources

RSS





print
News Now LiveWire
Maine credit unions put Food Mobile on the road to relieving hunger in rural areas http://t.co/R0xpt6BAZE
13 hours ago
.@TheNCUA's Matz: PALS should be exempt from Military Lending Act proposal #NewsNow http://t.co/Vy9uNhOIEr
14 hours ago
#NewsNow Iowa loan growth 3 times national bank rate http://t.co/fUvudPLg5d
16 hours ago
.@ICBA tallies its Home Depot data breach costs: $90M, 7.5M cards http://t.co/iJgRDC2AKZ
18 hours ago
.@icul's Jury elected treasurer of @WOCCU exec committee http://t.co/HEF1UChN8f
18 hours ago