LAS VEGAS — Western Corporate President/CEO Bob Siravo wasted no time addressing the elephant in the room during his opening remarks yesterday afternoon at WesCorp's Credit Union Outlook economic and financial conference.
Siravo reassured members that WesCorp is doing just fine financially, thank you, despite recent news reports of corporate losses. Of the 800 some-odd mortgage backed securities in WesCorp's portfolio, all are paying on time and as projected, he said, which is important to note.
"We always intended to hold those to maturity," Siravo said, adding that reports of MBS paying only 50 cents on the dollar tell the fates of desperate share holders, forced to sell the assets in a down market.
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In fact, Siravo mused that the devalued investments are a good deal these days, saying "someone will get some nice paying securities" after the Treasury's bailout of Fannie and Freddie is completed.
WesCorp's top officer also put corporate MBS losses into perspective. Even if WesCorp were to experience $50 million in impairments, or actual write-downs, it would pale in comparison to the $1 billion in annual investment cash flows it currently receives, he said.
Siravo added that corporates, specifically WesCorp, could withstand much larger losses than $50 million; but thankfully, according to his economists' calculations, they probably won't have to prove it.
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