WASHINGTON (8/10/11)--Standard & Poor's (S&P) downgrades of credit ratings of the U.S. government and a number of government programs this past week will have little effect on credit unions and the Corporate Stabilization program, said the National Credit Union Administration (NCUA) Tuesday. Buddy Gill, NCUA's senior strategic communications and external relations advisor, cited three reasons why: First, all federal banking agencies, including NCUA, affirm the current risk-weights for Treasury securities will not change. This includes other securities issued or guaranteed by the U.S. government, government agencies, and government-sponsored enterprises. "Credit unions do not have to worry about examiners treating NGNs (NCUA Guaranteed Notes) or Treasuries any differently for risk purposes," said Gill, who added NCUA will send a letter to credit unions to affirm "things don't change." Second, the NGNs retain their current AAA rating. Although they were placed on S&P's negative credit watch list Monday, their rating has not changed. "All the NGNs have been sold already and are collateralized so the negative watch status does not affect the costs to NCUA of these debt obligations," NCUA said. In other words, there is "no negative effect on NCUA's Corporate Stabilization Program costs." However, if a credit union or other entity bought NGNs and wants to sell them in the marketplace now rather than hold to maturity, the price or value may or may not be affected by S&P's action, said NCUA. Third, S&P did downgrade four NCUA unsecured debt guaranteed issues from two corporate credit unions the agency had guaranteed under the Temporary Corporate CU Liquidity Guarantee Program from AAA to AA+. However, the downgrade does not affect the costs to NCUA of these debt obligations. "This should be a "non-event" since these are not traded in the secondary market," Gill said. "Bottom line: the S&P downgrade has no negative impact on Corporate Stabilization costs," he said.