2008-06-13 23:07:23 -

- Fitch Ratings has placed the ratings for Constitution Corporate Federal Credit Union (Constitution) on Rating Watch Negative as follows:

Constitution Corporate Federal Credit Union

--Long-term Issuer Default Rating (IDR) 'AA-';

--Short-term IDR 'F1+';

--Short-term debt 'F1+';

--Individual 'A/B'.

Fitch affirmed the following ratings:

--Support '4';

--Support Rating Floor 'B'.

The rating action reflects Fitch's concern that the likelihood of Constitution realizing meaningful losses in its investment book has increased. Constitution's exposure to the troubled mortgage market, including home equity, subprime and Alt-A product, has contributed to a large unrealized loss position in relation to capital. While

Constitution has not realized any losses or impairment charges to date, further ongoing erosion in the mortgage market could produce material losses. However, should Constitution manage through current pressures without incurring material losses or impairment charges; Constitution's ratings would likely be removed from Negative Watch status. Fitch notes that a majority of the company's investment book remains of high quality.

Fitch recognizes Constitution's intent and ability to hold its investment securities. Liquidity is ample with low borrowings and access to sufficient contingent funding sources. The company's veteran management team employs good risk management practices in all areas, including liquidity, interest rate risk, and credit risk. Finally, Constitution's capital ratios compare well with most of the larger corporate credit unions in the network.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.

Fitch Ratings, Chicago
Rosalie Chua, 312-368-2051
Doris Hoffmann, 312-368-2057
Ken Ritz, 212-908-0368, New York
or
Media Relations:
Kenneth Reed, 212-908-0540, New York