Date: June 13, 2008

Earlier today Fitch Ratings completed their most recent review of Southwest Corporate's ratings. I would like to summarize the results of Fitch's latest review and provide my perspective on Fitch's commentary.

While Southwest Corporate's ratings were maintained, Fitch did place the following ratings on Negative Watch.

• Long- term Issuer Default Rating (IDR): AA-
• Short-term IDR: F1+
• Short-term debt: F1+
• Individual A/B

I encourage you to read Fitch's statement in full at the link below. There are several comments in Fitch's release that I would like to highlight including "Fitch recognizes Southwest's ample liquidity, low reliance on borrowings, robust risk management practices and solid franchise. Southwest has the intention, and importantly, the ability to hold its investment securities until recovery or maturity." Fitch also noted that "Southwest's earnings performance compares well with other corporate credit unions."

The primary reason that Fitch placed Southwest Corporate's ratings on Negative Watch is Fitch's concern of an increasing possibility that Southwest Corporate could realize investment losses related to the deteriorating collateral performance of mortgage-backed securities. This degree of concern reflects the general market conditions that we have all become so familiar with over the past 12 months.

I think that it is important to note that Fitch is citing a possibility but not a probability of losses. Southwest Corporate management is also very mindful of the possibility of experiencing losses related to our residential mortgage-backed security portfolio, but we remain confident that there is a low probability that we will realize meaningful investment losses. We base our confidence on the rigorous investment credit analysis that our staff performs each month including multiple loss scenario projections on a bond by bond basis, supplemented by ongoing external validations performed by third-party experts. Fitch cited the level of our investment credit analysis when commenting on the close monitoring of mortgage collateral performance by our staff.

In conclusion, I want to reiterate the same comments I relayed to you in Southwest Corporate's 2007 Annual Report.

• As with any market driven by supply and demand, the present lack of trading activity in mortgage-backed securities has caused our recorded asset fair values to decline.
• Despite the decline in recorded fair values, our investments are comprised of very high quality assets.
• Our asset fair values are expected to recover, over time, in conjunction with the resumption of more typical trading levels.
• In the meantime, our operating results have never been stronger, and Southwest Corporate has ample sources of liquidity to prevent the need to sell securities during the present market dislocation.

Fitch's decision to place Southwest Corporate's ratings on Negative Watch does not alter Southwest Corporate's ability to serve our members or management's outlook regarding the market dislocation's impact.

Please don't hesitate to contact me or the following individuals if you have any questions concerning the mortgage market developments and the impact to Southwest Corporate.

Click here to read Fitch's full release.

John Cassidy, President, CEO
214.703.7800
cassidyj@swcorp.org

Bruce Fox, Executive Vice President, Chief Investment Officer
214.703.7850
foxb@swcorp.org