Ambac Restructure Trickles Down to WesCorp
Later today, the $22 billion Western Corporate FCU will announce $25.4 in new OTTIs due to monoline insurer Ambac's declining ability to meet bond insurance claims, NCUA spokesman John McKechnie told the Credit Union Times.
Fourth quarter financial statements will be adjusted to reflect the new losses, he said. The corporate will further explain the move to members on WesCorp's monthly financial performance conference call.
WesCorp's Ambac-insured securities currently have a face value of $293 million, he said.
U.S. Central FCU announced yesterday the March 25 seizure of Ambac Assurance Corp's residential mortgage backed securities guarantees by Wisconsin's insurance commissioner caused it to record additional OTTIs in 2009 worth $274 million.
Members United Corporate FCU and Southwest Corporate FCU together have $520 million worth of securities wrapped by Ambac.
In total, the corporate network could lose as much as $400 million due to Ambac's inability to meet claims. McKechnie said the NCUA Board has not yet made any determinations about future assessments.
Audited 2009 year-end financial statements released yesterday by the $35 billion U.S. Central show the value of NCUSIF's $1 billion capital note is just $395 million. That is the only form of capital remaining on the seized cooperative's books.