WASHINGTON – U.S. Central FCU said it will report $1.2 billion in other-than-temporary-impairments for 2008, writing down $2.3 billion worth of private label mortgage backed securities to slightly less than 50 cents on the dollar.

Dave Dickens, U.S. Central’s executive vice president of ALM, said the subprime and Alt-A securities were rated triple-A at time of purchase; however, remittance reports show chinks in the armor of the underlying collateral, and management decided to recognize a permanent impairment. Of the $1.2 billion, $420 million is principal shortfall that won’t be recovered; however, the remaining $800 million could return in the form of repayment revenue.

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