Moody’s Takes Actions on Private Mortgage Insurers
Moody’s Investors Service today placed several private mortgage insurers on review for downgrade, reflecting continuing deterioration in the housing market.
Moody’s said the rating actions primarily reflect the rating agency’s expectation of further stress on the companies’ risk-adjusted capital position in light of continued deterioration in housing fundamentals, as reflected in the upward revisions to Moody’s loss expectations for certain residential mortgage-backed securities announced in September.
Moody’s said it is placing on review for possible downgrade the A2 insurance financial strength (IFS) ratings of Radian Group’s (NYSE: RDN) primary mortgage insurance subsidiaries, the Baa1 IFS rating of Radian Insurance, Inc. and the A3 ratings of financial guaranty insurance subsidiaries in the Radian Asset group. Moody’s has also placed the Ba1 senior debt rating of the holding company under review for possible downgrade.
Moody’s also announced that it is placing on review for possible downgrade the A3 insurance financial strength rating of the PMI Group’s (NYSE: PMI) US and European mortgage insurance operations. Moody’s has also placed the Baa3 senior unsecured debt and Ba1 junior subordinated debt ratings of the holding company, PMI Group, under review for possible downgrade. The Aa3 insurance financial strength rating of PMI Mortgage Insurance Ltd, the Australian mortgage insurer, remains under review for further downgrade pending the closing of the announced acquisition of PMI Australia and PMI Asia by QBE Insurance Group Ltd.
Moody’s is reviewing for possible downgrade the the A1 ratings of Mortgage Guaranty Insurance Company (MGIC) and MGIC Indemnity Corporation, and the A2 insurance financial strength rating of MGIC Australia Pty Limited. Moody’s also placed the Baa1 senior debt ratings of the holding company, MGIC Investment Corp, under review for possible downgrade.
Moody’s also is reviewing for possible downgrade the the A1 ratings Republic Mortgage Insurance.
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