S&P's LandAmerica ratings unaffected

Standard & Poor's said its ratings on LandAmerica Financial Group Inc. (BBB-/stable) and its related title insurance companies will not be affected by the company's agreement to acquire Capital Title Group Inc.

LandAmerica has agreed to acquire 100% of Capital Title's common stock for about $251 million, 80% in cash and 20% in LandAmerica common stock. About 50% of the cash consideration is expected to be generated from available cash, and 50% will be from additional borrowings. As of Dec. 31, LandAmerica's debt to total capital and GAAP interest coverage were about 27% and 9x, respectively.

S&P predicted that LandAmerica will continue to meet expectations of interest coverage in excess of 8x and debt to total capital of less than 35% after the acquisition.

Furthermore, the agency said the acquisition of Capital Title is consistent with LandAmerica's prior statements on expanding the company's geographic footprint, particularly in the western states, where it does not have a dominant market presence.

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