S&P lowers PMI ratings

Standard & Poor's said it lowered its counterparty credit and financial strength ratings on PMI Mortgage Insurance Co. to AA from AA+ and lowered its long-term counterparty credit and senior debt ratings on the company's parent, The PMI Group Inc., to A from A+, affecting $820 million of senior debt obligations.

At the same time, S&P affirmed its AA counterparty credit and financial strength ratings on PMI Mortgage Insurance Co. Ltd. and PMI Mortgage Insurance Ltd.

The outlook has been revised to stable from negative.

"The ratings on PMI are driven by the downgrade on the main operating subsidiary PMI MIC," said S&P credit analyst Donovan Fraser. "The downgrade reflects PMI MIC's performance, which is consistent with its peers and deterioration in its combined ratio and earnings. The ratings affirmations reflect Standard & Poor's opinion that the international mortgage insurance operations are core to the parent company PMI MIC, and that PMI stands firmly behind the respective policyholder obligations."

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