WALNUT CREEK, Calif., Oct. 7 /PRNewswire-FirstCall/ -- The PMI Group, Inc.
( PMI) (the Company) today announced that Standard & Poor's (S&P) has
reaffirmed its A- rating of PMI Mortgage Insurance Co. (PMI U.S.). S&P also
affirmed the ratings of PMI Mortgage Insurance Company Limited (PMI Europe) at
A- and the senior debt rating of the holding company at BBB- and the junior
subordinated debt rating at BB. The CreditWatch was removed from all ratings
and the rating outlook is negative. PMI U.S. remains an eligible mortgage
insurer for both Fannie Mae and Freddie Mac. As of June 30, 2008, PMI's
combined U.S. mortgage insurance companies had liquid assets of $2.3 billion.
Since March 2008, the Company has completed the following strategic and
business initiatives:
-- Signed a definitive agreement for the sale of PMI Australia
-- Signed a definitive agreement for the sale of PMI Asia
-- Repatriated approximately $150 million of excess capital from PMI
Guaranty to PMI
-- Began the closure of PMI Canada with plans to repatriate $60 million of
capital to the U.S. mortgage insurance operations
-- Announced the reconfiguration of PMI Europe to reduce expenses and
preserve capital
-- Renegotiated PMI's revolving credit facility
-- Borrowed $200 million from the revolving credit facility
-- Reduced our common stock dividend
PMI continues to work closely with each of the ratings agencies to
communicate its financial strength, capital initiatives, and value
proposition.
The ratings of CMG Mortgage Insurance Company and PMI Australia were not
affected by this action and remain at AA- for both companies.
The PMI Group, Inc.
The PMI Group, Inc. ( PMI), headquartered in Walnut Creek, CA,
provides innovative credit, capital, and risk transfer solutions that expand
homeownership and fund essential services for our customers and the
communities they serve. Through its wholly and partially owned subsidiaries,
PMI offers residential mortgage insurance and credit enhancement products. For
more information: http://www.pmigroup.com.
Cautionary Statement: Statements in this press release that are not
historical facts, or that relate to future plans, events or performance are
"forward-looking" statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Readers are cautioned that forward-looking
statements by their nature involve risk and uncertainty because they relate to
events and depend on circumstances that will occur in the future. Many factors
could cause actual results and developments to differ materially from those
expressed or implied by forward-looking statements. Such factors include,
among others, national or regional recessions, and further deterioration in
the housing, mortgage and related credit markets. In particular, declines in
housing values and/or housing demand, deterioration of borrower credit, higher
unemployment rates, changes in interest rates, higher levels of consumer
credit, higher mortgage default and claim rates, lower cure rates, higher
claim sizes, the aging of our mortgage insurance portfolios, adverse changes
in liquidity in the capital markets, the inability of loan servicers to
process higher volumes of delinquent loans, and the contraction of credit
markets could negatively affect our losses, loss reserves and paid claims.
Future ratings downgrades, if any, may negatively impact us in a variety of
ways and could, in isolation or taken together, negatively affect, among other
things, our U.S. and international business prospects and revenues, our
ability to compete in the U.S. and internationally, our GSE eligibility status
in the U.S., the cost of and/or availability of financing, our consolidated
financial condition, and our results of operations and cash flows. We will
likely need to raise significant amounts of capital. Given current market
conditions generally and in our industry, there can be no assurance that we
will be able to consummate any capital raising transactions on favorable
terms, or at all. Other risks and uncertainties are discussed in our SEC
filings, including our Annual Report Form 10-K for the year ended December 31,
2007 (in Item 1A) and Form's 10-Q's for the quarters ended March 31, 2008 and
June 30, 2008. We undertake no obligation to update forward-looking statements
SOURCE The PMI Group, Inc.
