(Reuters) - Old Republic International played down the possibility of a liquidity crisis and said it was unlikely regulators would seize its money-losing mortgage insurance business, after the company abandoned plans to spin off the unit.
The insurer had planned to separate the unit and had even entered into a deal to sell a fifth of the business in a leveraged buyout but it shelved the plan following stakeholders objections.
The company's North Carolina regulators have already placed the unit under supervision. It is now only allowed to pay claims at 50 cents on the dollar to preserve capital, leading to investor fears that the unit would be seized, triggering a default under the company's debt covenants.
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