Losses Won't Harm SunCorpRatings
DENVER - (06/03/04) -- Standard & Poor's said Wednesdaythat losses of almost $6 million by SunCorp FCU on the sale ofasset-backed securities won't affect the corporate credit union'stop A-1+ rating on its commercial paper. SunCorp reported a hit ofalmost $5 million in the fourth quarter of 2003, and of $990,000 inthe first quarter of 2004, on ABSs that were downgraded belowinvestment grade, then sold at a loss. The losses pushed 2004 netincome down for SunCorp to just $12,000, from $4.8 million the yearbefore. Eric Kenealy, president of the corporate, emphasized thatdespite the losses, the corporate is still in strong financialcondition, and realized net income of $2.3 million through Aprilthis year. Kenealy said despite the fact the securities were TripleA rated, as required under NCUA's rules and regulations, the issuerand servicer were not of investment grade. "We've made changes toour policies, as a result of this," he told The Credit UnionJournal. "As a result of this event, we have improved the qualityof the issuers and servicers to investment grade orbetter."