LENEXA, Kan. (11/17/08)--U.S. Central FCU will convert roughly $450 million of member capital share accounts (MCS) to permanent capital known as paid-in-capital (PIC) in efforts to stabilize its ratings and build long-term capital. About $3.8 billion of unrealized losses on U.S. Central’s securities as of Sept. 30, have caused Wall Street ratings agencies to downgrade the corporate in early 2008. “Ratings agencies look at the current capital we have,” David Dickens, U.S. Central vice president of asset liability management, told News Now. “No credit is given for MCS because it is not considered to be equity under GAAP [generally accepted accounting principles] since it is not perpetual. “The ratings agencies will only recognize capital that is a GAAP-qualifying equity,” he continued. What U.S. Central is in essence doing is asking its “members to make a change in the type of capital instrument,” Dickens said. “We’re attempting to make this move to solidify our current AA+ rating, which is the second-highest rating,” he added. U.S. Central still will have $2.6 billion in total capital, Dickens said. By converting $450 million from MCS to PIC, the corporate will increase its GAAP equity to $1.385 billion from $935 million. Since U.S. Central has a long-standing use of MCS as a capital component, the change could cause some consternation among members because the move might basically be saying to some that “this type of capital is not good enough,” Dickens acknowledged.