Moody's affirms Old Republic

Moody's Investors Service said it affirmed Old Republic International's Baa1 senior debt rating and its key property and casualty subsidiaries insurance financial strength at A1, and placed PMA Capital Corp.'s senior debt of Ba3 on review for possible upgrade. The ratings of Old Republic's title insurance and mortgage insurance subsidiaries were not affected by this action.

The outlook is stable.

These actions follow news that Old Republic intends to acquire PMA through an all stock transaction expected to close during the third quarter of 2010.

The addition of PMA, with its weaker credit profile, is an incremental credit negative for Old Republic, Moody's said.

Given the relatively small size of PMA's book of business in relation to Old Republic's total revenue and capital, Old Republic should be able to absorb PMA without straining its current credit profile, the agency said.

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