Fitch Ratings has downgraded mortgage insurers MGIC Investment Corp. and The PMI Group (TPG), citing in both cases loss expectations and capital constraints facing the companies as independent mortgage insurers.
Fitch downgraded MGIC Investment Corp.'s insurer financial strength (IFS) rating to "triple-B" from "A-minus," and the IFS rating for PMI Group (TPG) to IFS to "double-B" from "triple-B-plus." Subsidiaries of the companies were also downgraded.
Regarding MGIC, which includes MGIC Investment Corp. and its subsidiaries, Fitch said, "In addition to limited capital markets access, MGIC has few remaining assets that could be monetized to increase its capital resources," as the company did in 2008 with the sale of its interest in Sherman Financial LLC, "and will largely have to rely on current capital resources to satisfy ongoing MI claims."
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