Fitch Affirms IDRs of 8 Corporate Credit Unions; Downgrades Individual Ratings.CHICAGO -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. the Issuer Default Ratings (IDRs) of 'A+' and 'F1+' of the eight major corporate credit unions that it rates. The affirmation A solemn and formal declaration of the truth of a statement, such as an Affidavit or the actual or prospective testimony of a witness or a party that takes the place of an oath. An affirmation is also used when a person cannot take an oath because of religious convictions. is based on the National Credit Union Administration's (NCUA NCUA National Credit Union Administration (US government) NCUA Nbcs Control Unit Atm ) continued demonstrated support for these entities. Today's rating action follows the announcement from the NCUA that it will place U.S. Central Federal Credit Union (USC An abbreviation for U.S. Code. ) into conservatorship Conservatorship A circumstance in which the court declares an individual unable to take care of legal matters and appoints another individual, known as a conservator, to do so. Notes: This is sometimes referred to as "LPS Conservatorship. . The conservatorship will impair im·pair tr.v. im·paired, im·pair·ing, im·pairs To cause to diminish, as in strength, value, or quality: an injury that impaired my hearing; a severe storm impairing communications. the value of the capital share investment in USC of each corporate credit union rated by Fitch, resulting in a significant negative impact on each institution's capital. On Feb. 10, 2009, Fitch raised the support ratings of each of the corporate credit unions to '1' and established a corresponding support rating floor of 'A+'. These adjustments in the support ratings were triggered by tangible signs of increased government support for the corporate credit unions. The IDRs for each of the corporate credit unions were established at the support rating floor of 'A+' to emphasize the importance of government support in assessing the probability of default Probability of default (PD) is a parameter used in the calculation of economic capital or regulatory capital under Basel II for a banking institution. This is an attribute of bank's client. for these entities. The stand alone financial profile of each corporate credit union rated by Fitch has come under varying degrees of stress in the current climate. The greatest concentration of risk has emanated from the companies investment portfolios that have included exposures to asset types that have exhibited higher levels of volatility and illiquidity than was originally expected. Fitch has articulated the relative degree of stress via adjustments to the corporate credit union's Individual ratings, which are designed to indicate a company's stand alone financial profile absent any support. The decline in capital related to the expected impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of the USC capital investments carried by the corporate credit unions will likely result in capital ratios falling below regulatory capital minimums at each of the rated corporate credit unions. Fitch has lowered the Individual rating of each corporate credit union to 'E', in recognition of the sharp decline in capital. The NCUA has reiterated its intention to support the stability and integrity of the U.S. credit union system. In Fitch's view, this demonstrates the existing support ratings, support floors, and IDRs assigned to individual corporate credit unions remain appropriate. In light of the NCUA's public statements and actions to date, Fitch expects support and/or regulatory forbearance Refraining from doing something that one has a legal right to do. Giving of further time for repayment of an obligation or agreement; not to enforce claim at its due date. A delay in enforcing a legal right. to be forthcoming that will allow these entities to operate at current rating levels. Fitch has downgraded the following ratings and removed them from Rating Watch Negative. Central Corporate Credit Union -- Individual downgraded to 'E' from 'B/C'. Constitution Corporate Federal Credit Union -- Individual downgraded to 'E' from 'D/E'. Eastern Corporate Federal Credit Union -- Individual downgraded to 'E' from 'B/C'. First Corporate Credit Union -- Individual downgraded to 'E' from 'C'. Mid-Atlantic Corporate Federal Credit Union -- Individual downgraded to 'E' from 'B/C'. Members United Corporate Federal Credit Union -- Individual downgraded to 'E' from 'C/D'. Southeast Corporate Federal Credit Union -- Individual downgraded to 'E' from 'C'. Southwest Corporate Federal Credit Union -- Individual downgraded to 'E' from 'C/D. Fitch has affirmed the following ratings with a Stable Outlook: Central Corporate Credit Union -- Long-term IDR IDR In currencies, this is the abbreviation for the Indonesian Rupiah. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 'A+'; -- Short-term IDR 'F1+; -- Short-term debt Short-term debt Debt obligations, recorded as current liabilities, requiring payment within the year. 'F1+'; -- Support '1'; -- Support floor 'A+'. Constitution Corporate Federal Credit Union -- Long-term IDR 'A+'; -- Short-term IDR 'F1+; -- Short-term debt 'F1+'; -- Support '1'; -- Support floor 'A+'. Eastern Corporate Federal Credit Union -- Long-term IDR 'A+'; -- Short-term IDR 'F1+'; -- Short-term debt 'F1+'; -- Support '1'; -- Support floor 'A+'. First Corporate Credit Union -- Long-term IDR 'A+'; -- Short-term IDR 'F1+'; -- Support '1'; -- Support floor 'A+'. Mid-Atlantic Corporate Federal Credit Union -- Long-term IDR 'A+'; -- Short-term IDR 'F1+'; -- Support '1'; -- Support floor 'A+'. Members United Corporate Federal Credit Union -- Long-term IDR 'A+'; -- Short-term IDR 'F1+'; -- Short-term debt 'F1+'; -- Support '1'; -- Support floor 'A+'. Southeast Corporate Federal Credit Union -- Long-term IDR 'A+'; -- Short-term IDR 'F1+'; -- Short-term debt 'F1+'; -- Support '1'; -- Support floor 'A+'. Southwest Corporate Federal Credit Union -- Long-term IDR 'A+'; -- Short-term IDR 'F1+'; -- Short-term debt 'F1+'; -- Support '1'; -- Support floor 'A+'. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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