SAN DIMAS, Calif. – The slow-going process of determining collateralized debt obligation (CDO) values and the effect of U.S. Central's losses is causing some corporates to delay December 2008 financials, or release them with an asterisk.
The $24 billion Western Corporate FCU's December unaudited financial statements report $57.8 million in year-end net income, but also $2.5 billion in unrealized losses. More importantly, WesCorp's Dec. 08 numbers do not include any other-than-temporary-impairments (OTTIs).
Chief Financial Officer Jim Hayes said he's waiting on data to accurately value CDOs, and is also awaiting the results of a portfolio-wide audit.
"Each CDO contains approximately 100 underlying RMBS/ABS bonds, which in turn, each have 8,000 to 12,000 individual loans in them," Hayes said of the process.
The $8.8 billion Members United Corporate FCU isn't releasing its December unaudited financials until late February. Senior Vice President of Marketing Victor Vrigian said his shop is also in the process of determining OTTIs, and is also knee deep in an annual audit.
"I wouldn't characterize it as a hold up, but it is an involved process and it does take time," Vrigian said.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
