PMI Responds to Fitch Downgrades

The PMI Group Inc. responded to downgrades by Fitch Ratings with an assurance that it has "significant financial resources" to pay claims. The company also issued a reminder that it is still an approved mortgage insurer for Fannie Mae and Freddie Mac. Besides the two-notch cut in the insurer financial strength of the U.S. operations [see above item], Fitch dropped the IFS rating on PMI's international businesses from AA to A-plus and the parent company's long-term issuer rating was cut from A to BBB-plus. After Standard & Poor's cut its ratings in April, PMI was ordered to create a remediation plan. The plan, which has been submitted to Fannie and Freddie, details its strategy on how to return to profitability as well as its financial forecast and capital plan, among other things. Options being considered by PMI include capital markets transactions, utilization of excess capital at its wholly owned financial guaranty subsidiary, reinsurance, and asset sales.