S&P Downgrades 3 Mortgage Insurers

Standard & Poor's Ratings Services has downgraded the counterparty credit ratings of three of the country's largest mortgage insurers. The outlook for all three is negative. S&P downgraded Republic International Corp. from A to A-minus, while its counterparty and financial strength ratings on Republic's core subsidiaries were downgraded from AA-minus to A-plus. The rating agency downgraded PMI Group Inc. from BBB-plus to BBB-minus and its U.S. and European MI subsidiaries from A-plus to A-minus. The ratings were placed on CreditWatch with negative implications. S&P also lowered its counterparty rating on Radian Group Inc. from BBB to BB-plus and its ratings on Radian's MI subsidiaries from A to BBB-plus, while removing them from CreditWatch negative. In addition, S&P affirmed its AA ratings on Genworth Financial Inc.'s core mortgage insurance subsidiaries (outlook negative) and its BBB counterparty rating on MGIC Investment Corp. and its A counterparty and financial strength ratings on MGIC's MI subsidiaries (outlook negative). S&P attributed the downgrades to "expectations for further deterioration in key variables that influence claims, our reassessment of the long-term fundamentals of the mortgage insurance industry, our concerns about the profitability of insured mortgages originated in 2008, and our comparisons of firms' actual results for the first half of 2008 with our forecasts." S&P can be found online at http://www.standardandpoors.com.