The $3.7 billion Corporate One Federal Credit Union is placing full reliance for repayment on monoline insurer Ambac Assurance Corp, bucking the trend of other corporates who have recorded OTTIs on affected securities.

In its March 2010 financial reports posted online (www.corporateone.coop), Corporate One explained the decision, saying after analysis of the Wisconsin insurance commissioner's forced rehabilitation plan, it believes Ambac can meet payment obligations.

Chief Financial Officer Melissa Ashley said the Columbus, Ohio-based corporate reviewed supporting court documents and the Ambac's 2009 year-end statutory financial statements, in which it reported a statutory surplus of $802 million.

"Based on our review of the facts, we believe that OCI acted in a manner to preserve the surplus for the benefit of all policyholders versus letting the company continue to deteriorate," she said.

Of Corporate One's 16 securities wrapped by Ambac, 15 are residential MBS that have been allocated to the insurer's new segregated account, Ashley said. Only nine will require Ambac support for repayment.

Had her corporate placed only 25% reliance on Ambac as U.S. Central did, Ashley said the resulting OTTI would have been approximately $4.5 million. Corporate One currently has $25 million in retained earnings to protect against capital impairment.