MADISON, Wis. – CUNA Mutual Group was tallying up the affects of the plunge in financial markets on its $8 billion investment portfolio, which includes $6 billion worth of bonds throughout the U.S. economy.
The credit union insurer expects to lose some if its investment on a $3 million corporate bond issued by American International Group, but sold off most of its Lehman Brothers Holdings investments two weeks ago, as pressures mounted on the troubled brokerage, according to Jeff Post, president of CUNA Mutual. “We sold out of our position 10 or 12 days ago because we were uncomfortable with the direction they were going,” Post told The Credit Union Journal. He said CUNA Mutual holds no private label mortgage backed securities issued by Lehman.
CUNA Mutual also was somewhat insulated from the fallout over the takeover of Fannie Mae and Freddie Mac because it owns no stock, common or preferred, in the two mortgage giants. But, Post noted, it does hold mortgage backed securities issued by the two, which have rallied since the government action.
“No one is immune,” said Post, of the spreading effects of the worst financial crisis since the Great Depression. He expects continued fallout in the coming weeks and months as more financial companies come under stress.
