Moody's affirms QBE Insurance

Moody's Investors Service said it affirmed its A3 issuer rating of QBE Insurance Group Ltd. following news of its proposed acquisition of PMI Mortgage Insurance Ltd. and PMI Asia for about A$1 billion.

The outlook remains stable.

The affirmation is based on the fact that the funding of the proposed transaction - partly by cash, a contingent note and some additional senior debt - would not materially increase QBE's financial leverage, Moody's said.

Despite current negative pressure on profitability, the stand-alone financial profile of PMI Australia remains solid, the agency said. The transaction is expected to bring in good returns for QBE, absent a major deterioration in the housing market or economy, Moody's said.

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