Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive
150x172_CUEffect.jpg
Contacts
LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

News Now

CU System
U.S. Central to convert accounts to stabilize ratings
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.


RSS





print
News Now LiveWire
.@HUDgov requires investors to delay foreclosure for a year and offers a non-profit only pool sale http://t.co/WYzQrTL3QA
2 hours ago
#DDoS attacks shorter, intense, more expensive: @VERISIGN http://t.co/zDFTPgTqQM
4 hours ago
eCommerce sites at risk of hacking as well http://t.co/q7ANQPfx2g
4 hours ago
As of Friday pm,#CUs, state CU leagues, CUNA & others had sent 1,654 comment letters on the @TheNCUA 's #RBC2015 plan http://t.co/1SKDxE1D5S
5 hours ago
#DDoS attacks can expose weaknesses that cybercriminals can exploit. http://t.co/8HGmDuCV9j
5 hours ago