WALL STREET – Fitch Ratings, which has kept a close watch on deteriorating mortgage securities at several corporate credit unions, adding ed several more corporates to its "Negative Watch List" last night.
The rating agency particularly cited several corporates with growing losses on their mortgage holdings, including Members United Corporate FCU, Southwest Corporate FCU, Southeast Corporate FCU, and Constitution Corporate FCU.
Fitch cited "expected losses on certain investment securities and the potential for additional losses" related to their mortgage backed securities.
Among the corporates added to the Negative Watch List were Members United, which reported a $1.2 billion unrealized loss at Aug. 31; Constitution Corporate, which reported a $199 million loss; Southwest Corporate, a $1 billion loss and Southeast Corporate, a $114 million loss.
In recent months several other corporates with large mortgage securities holdings have also been cited, including WesCorp FCU, which reported $1.7 billion in losses through Aug. 31, and U.S. Central FCU, $3.1 billion in losses.
The ratings were issued after the market closed yesterday and the Fitch analysts would not comment on them because they had not notified the corporates yet.
The ratings are an important gauge for investors who may want to buy securities issued by the corporates when they want to increase liquidity.
