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Moody's lowers U.S. Central Federal
Moody's Investors Service said it downgraded the long-term senior debt rating of U.S. Central Federal Credit Union to A1 from Aa1, and placed the company's long- and short-term ratings on review for possible further downgrade.
The agency said that the rating action principally reflects the fact that Moody's loss expectation for U.S. Central Federal's residential mortgage-backed securities portfolio is substantial relative to its capital position.
Although U.S. Central Federal's securities portfolio is of relatively high quality, the extended period of illiquidity in asset-backed securities markets and rising loss expectations for these securities have resulted in substantial unrealized valuation losses of $4.6 billion as of Oct. 31, Moody's said.
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