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CU System
U.S. Centrals IDR rating affirmed Fitch adjusts outlook
NEW YORK and LENEXA, Kan. (1/29/08)--U.S. Central FCU's long-term issuer default rating (IDR) has been affirmed at AAA, Fitch Rating announced Friday. Fitch also adjusted the "outlook" rating from stable to negative, a move that comes as no surprise in today's economy. “U.S. Central is pleased by the reaffirmation of ‘AAA’ by Fitch Ratings, especially given the severity of the dislocation of today’s fixed income markets, and the fact that a significant majority of major financial institutions in the U.S. are on watch or have already been downgraded by rating agencies," Francis Lee, U.S. Central president/CEO, told News Now. "The 'negative' outlook that accompanied the reaffirmed Fitch rating does not come as a surprise to U.S. Central, in light of the trend in market events," Lee said. Lee noted that "U.S. Central continues to be a strong, healthy institution with $2.4 billion in capital and access to significant funding sources of liquidity.” Fitch said the AAA rating reflects U.S. Central's "solid credit fundamentals, as well as its franchise strength and its important role within the credit union industry." It added that U.S. Central's balance sheet "has a low risk profile, and its funding and liquidity positions remain quite strong." It also affirmed the short-term IDR at F1+. Fitch, in adjusting the outlook, said U.S. Central has "exposure to the troubled mortgage market, particularly non-prime mortgage-backed securities." It noted that losses have been absorbed through earnings, and management has taken steps to reduce its mortgage exposure. "Aided by its strong liquidity position, should USC manage through current market pressures without incurring meaningful additional losses and continue to reduce incremental risk in the investment book, Fitch would likely revise USC's Rating Outlook to Stable," Fitch said.


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