LENEXA, Kansas — U.S. Central Credit Union informed its members recently about $20 million in unrealized investment-related losses appearing on its July 31, 2007 financial statement.
U.S. Central attributed $3.5 million of the losses to normal business. The remaining $16.5 million loss was due to spread widening in a portfolio of primarily fixed-rate, AAA-rated commercial mortgage-backed securities.
U.S. Central said in a letter to owners that the problems in the subprime arena were not the cause of this loss. "While excessive liquidity has fueled easier financing of most asset classes, the CMBS sector has not experienced the problems now seen in the subprime residential mortgage sector," the letter stated.
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