Fitch Cuts RMIC's Ratings in Wake of Parent's Losses

Fitch Ratings, Chicago, has dropped Republic Mortgage Insurance Co.'s issuer financial strength rating from "A+" down to "BBB". The rating agency said it feels there is a reduction in the level of commitment at RMIC's parent company Old Republic Corp. to provide additional capital to the mortgage insurer; as a result RMIC is now being rated on a "stand alone" basis. The title insurance subsidiary, Old Republic Title Group, kept its IFS of "A+" but the rating was placed on Ratings Watch Negative in part because of operating results that continued to be challenged by the current operating environment. ORI lost $53.9 million ($0.23 per share) in the first quarter 2009, compared with a loss of $19.0 million ($0.08 per share) one year prior. RMIC had an operating loss of $144.6 million, compared with a loss of $122.3 million one year prior, while Old Republic Title had an operating loss of $9.0 million, an improvement over a loss of $12.6 million one year prior. ORI had previously purchased stock in MGIC Investment Group and The PMI Group as a long-term investment. As of March 31, 2009, those investments had an original cost of $416.4 million; an impaired cost of $106.8 million and a market value of $32.1 million.