The graph below shows the range of projected gross losses on the remaining Legacy Assets, illustrating the high and low end of the projected losses range. Legacy Asset losses that are greater than those projected during issuance of the NCUA Guaranteed Notes (NGNs) will trigger guaranty payments from the Stabilization Fund.
Some of the remaining Legacy Assets have long stated maturity dates and, as the graph indicates, the NCUA anticipates losses on these assets to continue far into the future.
The realized losses show how the Legacy Assets are actually performing and will be updated as new data becomes available. This chart will be updated semi-annually. The next update will occur by November 2015.
Timeline of Legacy Asset Gross Losses as of December 31, 2014
Note: The projections in the graph above of remaining Legacy Asset losses are a portion of the total Resolution Costs. There are other costs associated with the resolution that are not included in the graph; however, losses on the remaining Legacy Assets are the largest and most variable component.
The current graph presents gross losses (excluding projected cash inflows associated with the NGN Program) and includes all Legacy Assets (not just those securitized into NGNs).
* The NCUA started the NGN Program as part of its strategy to isolate and fund the Legacy Assets of the AMEs, to provide urgently needed cash liquidity, and to significantly reduce losses in the credit union system. When the NGNs mature, the NCUA Board will consider all available options to minimize the overall cost to credit unions. Options may include, but are not limited to: re-securitization, outright sales, and holding the Legacy Assets. Additionally, combinations of the above strategies may be considered in an effort to fund the Legacy Assets at the lowest long-term cost.