Tuesday, January 11, 2011 11:39:00 AM
CHICAGO - Fitch Ratings has affirmed the 'A+' long-term Issuer Default Rating (IDR) and 'F1+' short-term IDR of Mid-Atlantic Corporate Federal Credit Union (Mid-Atlantic), following the announcement of its plans to pursue a merger with VACORP Federal Credit Union (VACORP). The Rating Outlook is Stable. Mid-Atlantic and VACORP have entered into an agreement in principle to pursue a merger and Mid-Atlantic, which will be the surviving charter, has begun its due diligence process.
Fitch's affirmation of Mid-Atlantic's ratings, with a Stable Rating Outlook reflects that Mid-Atlantic's IDR is currently at its Support rating floor. The Individual rating, which reflects the company's standalone financial position absence external support, remains an 'E'. The 'E' rating denotes a company that requires or will require external support. In Fitch's view, although the company never fell below its mandatory regulatory capital requirements, the company still faces significant capital challenges and continues to benefit from the government support provided to the industry to stabilize the corporate credit union system. However, as Mid-Atlantic executes on its current capital raising initiatives while maintaining its otherwise sound fundamentals, the company's Individual rating would likely be upgraded.
Fitch also affirms the following ratings with a Stable Rating Outlook:
Long-term IDR at 'A+';
Short-term IDR at 'F1+';
Individual at 'E';
Support at '1';
Support floor at 'A+'