NEW YORK (4/8/09)--Standard & Poor's Ratings Services took action Monday by lowering the ratings of six corporate credit unions and keeping them on CreditWatch Negative. The action was prompted by the impact of National Credit Union Administration's (NCUA) recent actions on corporate credit unions' capitalization, said S&P, noting that the corporates' capitalization was "severely impaired as the result of the expected write-down of their capital investments in U.S. Central CU." The ratings service said it withdrew the ratings of two of the six corporates--Eastern Corporate FCU (EasCorp) and Central Corporate CU (Cencorp)--at their request. The remaining corporates credit unions are:
* Southeast Corporate FCU; * Southwest Corporate FCU; * Constitution Corporate FCU; and * SunCorp Corporate CU.
The remaining corporates will stay on Credit Watch Negative "because of continued negative pressure on the ratings from weak capitalization, the potential for further securities write-downs in the near term, and uncertainty as to the direction and form of future regulatory action toward these companies," S&P said. It said NCUA's program to guarantee all member deposits through December 2010 "is crucial to the corporate credit unions' creditworthiness." For more information about the ratings, use the resource link.