LENEXA, Kan. – July 21 was an historic moment for Charlie Mac. It completed its first loan securitization made up of credit union loans, a long standing goal for the secondary market player. This particular security was worth $160 million and consisted of 30-year credit union loans from six credit unions – Navy FCU, Wescom CU, Bethpage FCU, Bank Fund Staff FCU, Associated CU and Missoula FCU. All of these CUs have a billion plus in assets or close to it (Associated CU has roughly $800 million) except for Missoula which has approximately $216 million and proves CharlieMac can work for mid-sized CUs as well said Charlie Mac Managing Director Karen Pease. Pease said this securitization (those with Bloomberg can find it as Charlie Mac 2004-1) is important for credit unions because as the loans pay off and prove that CU loans perform better than non-credit union loans they will get better pricing from the capital markets which Charlie Mac can funnel back to credit unions. The security was sold out almost immediately. "Our goal in creating Charlie Mac was to take these loans and bring them to the capital markets as a security to prove the story that credit union loans perform better than non-credit union industry loans. To do that we have to secure them and show history," said Pease. Pease said if loans were to go delinquent and hurt the flow of money to investors, that could hurt future offerings, but credit union loans have a stellar performance record she said. A security of fixed rate mortgages should pay investors for five to seven years. In other news from Charlie Mac, it now has 22 corporates active with its programs. Charlie Mac acts as a secondary market option for credit unions to sell off auto loans and jumbo mortgages. "We've surpassed the $1 billion mark in loans purchased," said Pease. That $1 billion is an aggregate volume from when Charlie Mac was first formed back in 1998. The first half of 2004 has been particularly active. "This has been the most volume purchased so far this year since inception. The year to date number is $324 million," said Pease. What's more eye-opening is that $324 million is from just 10 credit unions. Pease said there are 86 more credit unions in the pipeline in various stages of funding. She said with mortgage origination expected to be about $2.1 trillion this year, down from the predicted $2.4 trillion, the purchase market is going to be more important to credit unions vs. refinancing. Couple that with NCUA's concern about interest rate risk from credit unions holding long-term, fixed rate mortgages, and Pease expects the end of the year could remain active for its jumbo mortgage program. Pease also noted that since the Charlie Mac name was unveiled last October, it has added 10 new corporates to the program. Charlie Mac, a U.S. Central subsidiary, was formerly known as Network Liquidity Acceptance Company. It changed the name in an effort to become a more recognizable secondary market option for credit unions. [email protected]