Fitch Eyes MGIC Sub's Debt Ratings

The insurer financial strength rating of Mortgage Guaranty Insurance Corp. has been affirmed at AA-plus by Fitch Ratings, but the outlook for the AA-minus debt ratings of MGIC Investment Corp. has been changed from Stable to Negative.Fitch said MGIC's "very strong" insurer financial strength rating reflects "its leadership position in the mortgage insurance marketplace, its consistent profitability and [consequent] capital generation capabilities, and its high-quality balance sheet." However, the negative rating outlook on its MGIC Investment subsidiary's debt ratings "reflects Fitch's concern with the parent company's more aggressive management of its financial leverage," the rating agency said. "At March 31, 2003, the ratio of debt to adjusted total capital was 19.0%, up from 13.7% at year-end 2001."