CU Times - 12/17/2009
Investment losses at the $21 billion Western Corporate Federal Credit Union are “substantially greater” than originally projected by Clayton Holdings earlier in the year, Chief Investment Officer Joe DiMichele told members in yesterday’s Webcast.
Clayton’s updated September projections anticipate WesCorp will write off $40 million for the month of December and another $65 million in January 2010. Those figures are roughly double what Clayton originally projected back in March.
Cumulatively, the new figures increase WesCorp’s estimated actual losses to more than $2.5 billion by Dec. 31, 2010. Clayton had originally only estimated about $1.6 billion in actual losses by that time.
While delinquencies have leveled off in subprime and Alt-A securities, Option-ARM and prime delinquencies show “no signs of abating,” which DeMichele said “is of some concern to us.” “Fundamentally, the outlook for securities continues to deteriorate, albeit at a slower pace,” he said, adding WesCorp’s portfolio is “still under some stress” as financial managers look into the future.