‘Negative Outlook’ Is Not A Down grade In U.S. Central’s Rating

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In regards to the story about Fitch reaffirming U.S. Central’s long-term Issuer Debt Rating (IDR) at AAA and its short-term IDR at F1+, I was pleased to note the many positive elements the story covered including the low risk profile, solid credit fundamentals, and strong funding and liquidity position that substantiates Fitch’s reaffirmation of U.S. Central’s very high credit ratings. However, the headline, which referenced a downgrade, was misleading and in fact, inaccurate. A downgrade occurs when the credit rating is lowered, which did not happen. The outlook change from stable to negative that Fitch noted means there are some business conditions that have the potential to lead Fitch to downgrade U.S. Central’s long-term rating. The negative outlook is not a downgrade nor is it necessarily a precursor to a rating downgrade.

Rating agencies are clearly taking a cautious view of all financial institutions given the market conditions at this time. This much is clear, U.S. Central’s reaffirmed AAA rating by Fitch continues to reflect the fact that U.S. Central is in the top echelon of financial institutions in the United States.

I appreciate the opportunity to share this clarification with you.

Brad L. Miller Executive Director

Association of Corporate Credit Unions



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