The $8.9 billion Members United Corporate Federal Credit Uniondidn't include any shockers in its July 2009 financial statements,released earlier today. Member credit unions had already beeninformed the Warrenville, Ill.-based corporate would record $81million in U.S. Central member capital account depletions in July,so the reported $78 million net loss for the month wasexpected.

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In fact, the most interesting information in the financialreports pertained to the continued deterioration of monolineinsurers, which sold credit enhancements to several corporates toguarantee timely payments of interest and principal on structuredinvestments.

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In addition to FGIC and Syncora Guarantee, which have alreadybeen reported as impaired, insurer Ambac recently suffered severeratings downgrades last month by S&P. Combined, FGIC andSyncora only represent 1.4% of Members United's invested assets;however, Ambac backs 4.1%, representing nearly $400 million.

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"While Ambac continues to be in compliance with its regulatorycapital requirements due to the approved release of a majority ofits contingency reserves, the amount of cushion for potentialadditional future losses has fallen substantially," the corporatereported in its financial reports, available online.(www.membersunited.org)

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The corporate also reported additional deterioration in thehighest reported ratings of its investment portfolio, as thepercentage of non-investment grade ratings increased, and thepercentage of AAA-rated bonds decreased.

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