S&P cuts PMI

Standard & Poor's said that it lowered the counterparty credit and financial strength ratings on PMI Mortgage Insurance Co. to B- from B+ and placed the ratings on CreditWatch with negative implications. S&P lowered the counterparty credit and senior debt ratings on PMI's holding company PMI Group Inc. to CCC- from CCC+ and placed the ratings on CreditWatch with negative implications.

The downgrade of PMI reflects the expectations of continued elevated losses in 2011 and 2012 relative to the company's statutory capital base, the agency said.

Given PMI's consolidated statutory capitalization of $677 million at the end of first-quarter 2011, losses in line with or in excess of the industry trends could put significant pressure on PMI's statutory capital by year-end 2012, the agency added.

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