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CU System
Ratings agency affirms Southeast Corporate rating
CHICAGO (7/18/11)--A ratings agency has affirmed the "A+" long-term Issuer Default Rating (IDR) and "F1+" short-term IDR of Tallahassee, Fla.-based Southeast Corporate FCU, with a "stable" rating outlook. The rating reflects Southeast's IDR is current at its Support rating Floor and reflects that the corporate credit union's standalone financial position--absent external support--remains an "E" (requiring external support), said Fitch Ratings, a Chicago-based firm (BusinessWire July 1). Southeast "continues to benefit from the various support mechanisms put in place to maintain liquidity in the corporate credit union system and that it is still operating with regulatory forbearance " from the National Credit Union Administration (NCUA), Fitch said in a press release. Southeast is in the middle of raising $80 million in perpetual contributed capital from its member credit unions by October as a part of its 10-year strategy and recapitalization plan (News Now May 24). The company began its 90-day capital subscription process and expects commitments by October. It also plans to reduce its balance sheet to $2 billion and its operating expenses to $10.6 million, and manage its legacy assets. Fitch said the corporate continues to face capital challenges and additional "other than temporary impairment" (OTTI) charges on its legacy assets. To date, Southeast has recorded $43.5 million of OTTI on 25 mortgage-related securities, said the ratings agency. "The company's Individual Rating could move positively if it makes notable progress towards achieving the objectives of its business and capital plan," Fitch concluded.


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