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LENEXA, Kansas — Standard & Poor’s rating agency recently lowered U.S Central’s long-term debt rating to AA+, its second highest, from AAA, its highest. The new rating assignment was “prompted by S&P’s concern over values of mortgage-related securities in U.S. Central’s investment portfolio,” according to U.S. Central.

The change was preceded by a report in Bloomberg news, stating that U.S. Central took a 2% loss on its total assets by taking a $760 million fourth quarter write-down on the $40 billion in investment securities in its portfolio and that credit unions are ultimately vulnerable to losses on home loans and related bonds. U.S. Central Executive Vice President Dave Dickens termed that take inaccurate. “FASB 115 has three different accounting methods (held-to maturity, available for sale, or trading) Dickens explained. “If we had to sell our total mark-to-market $40 billion portfolio its value would be $1.1 billion less than what we paid for it. While everyone is looking at the difficulties in fixed income securities today, unlike banks, we have ample liquidity.”

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