Moody's Investors Service downgraded the short-term debt ratings of four corporate credit unions to Prime-3 from Prime-1.
The affected corporates were Members United Corporate FCU, Central Corporate CU, Corporate Central CU and SunCorp Corporate CU. Following the April 14 rating actions, the outlooks for all four corporates are developing.
The actions reflect the corporates' weakened credit assessments, particularly because of the eventual impairment of the corporates' capital investments in U.S. Central FCU and losses in their securities portfolios. However, Moody's said it viewed the probability of support from the federal government and credit unions as high, which provided a "significant lift" to the short-term ratings.
The Prime-3 ratings and developing outlooks also reflect the uncertainty of potential regulatory or structural changes to the corporate network.
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