WARRENVILLE, Ill. – Members United Corporate FCU yesterday became the latest corporate credit union to project bigger losses on its investments due to difficulties at its major bond insurer, Ambac Assurance Corp.
The $8.5 billion corporate has been unable to report its financials for the past three months and says it won’t be able to provide financials until the end of May while its auditor conducts a comprehensive review of its troubled investments.
But Members United on Monday reported to its members that the ongoing reorganization at Ambac, which has been barred by regulators from paying out claims, is likely to add to its losses. Last week, both U.S. Central FCU and WesCorp FCU increased their losses due to the troubles at Ambac and other bond insurers. U.S. Central, for example, said it had expected to recover 80% of its investments insured by Ambac but now expects to recover just 25%.
Members United had $300.4 million of its investments “wrapped,” or insured by Ambac as of March 31.
Members United is expecting additional losses on investments wrapped by other troubled bond insurers, including MBIA, Financial Guarantee Insurance Corp., Syncora Guarantee and FSA (now Assured Guarantee Municipal).
Losses at Members United have forced it to deplete the member capital owned by its 2,000 credit union members, leaving just $151 million in capital, before any write-downs for the first quarter.
