S&P Eyes GEMICO's AAA Rating

Standard & Poor’s has put GE Mortgage Insurance Corp., Raleigh, N.C., on CreditWatch Negative and threatened to drop the AAA rated mortgage insurer (one of only two with that rating) to AA-plus.S&P said the move was made because of changes in its ratings criteria that "limit the rating support for a strategically important subsidiary to one notch below the rating on the parent. In addition, S&P is uncertain as to General Electric’s long-term plans for its operations within the insurance sector." A statement issued by GEMICO said there is no change in the financial condition of the company, and that it "continues to hold capital well in excess of S&P 'AAA' requirements." GEMICO also noted that the other two rating agencies, Fitch Ratings and Moody's Investors Service, have both reaffirmed the AAA rating of the company. S&P is looking to meet with GE management in the next month, and based on that discussion it says it will decide whether to reaffirm the AAA rating or cut it one notch.