Fitch Downgrades PMI Debt

The senior debt ratings of The PMI Group Inc. have been downgraded by Fitch Ratings, though it has affirmed the insurer financial strength ratings of PMI Mortgage Insurance Co. and its affiliates.The outlook on the companies' ratings has been revised to negative. The debt ratings on several issues of PMI Group senior notes were downgraded from A-plus to A, and the trust preferred securities rating of PMI Capital I was downgraded from A to A-minus, Fitch reported. The IFS ratings of PMI Mortgage Insurance, PMI Guaranty, PMI Insurance Co., PMI Mortgage Insurance Co. Ltd. (PMI Europe), and PMI Mortgage Insurance Ltd. (PMI Australia) were affirmed at AA. Fitch noted that the actions followed PMI Group's announcement of a net loss of $86.8 million in the third quarter, stemming in part from a rise in mortgage insurance loss reserves. "The increase in reserves has been driven by rising delinquencies within [PMI Mortgage Insurance]'s insured portfolio, combined with larger-than-average claim sizes," Fitch said.