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S&P downgrades U.S. mortgage insurers
Standard & Poor's said it lowered its counterparty credit and financial strength ratings on United Guaranty Residential Insurance Co. to BBB+ from A-.
The agency lowered Radian Group Inc.'s counterparty credit rating to CCC from BB, Radian Guaranty Inc.'s counterparty credit and financial strength ratings to BB- from BBB+ and its counterparty credit and financial strength ratings on Radian Insurance Inc. to BB- from BB+ and on Radian Asset Assurance Inc. to BBB- from BBB+.
The agency lowered its counterparty credit rating on PMI Group Inc. to CCC from BBB- and PMI Mortgage Insurance Co.'s counterparty credit and financial strength to BB- from A-.
The agency lowered its counterparty credit and financial strength ratings on Genworth Mortgage Insurance Corp. to BBB+ from A+ and on Republic Mortgage Insurance Co. to A- from A.
The BB counterparty credit and financial strength ratings on Mortgage Guaranty Insurance Corp. were affirmed.
The ratings of Radian Insurance and Radian Asset Assurance remain on CreditWatch with negative implications, and the implication of the CreditWatch on PMI Group was changed to developing from negative.
The remaining ratings were removed from CreditWatch negative, and their outlook is stable.
S&P said the downgrades reflect a significant increase in its estimate of mortgage insurers' loss costs for loans insured through the flow channel and the impact this revision will have on the companies' operating results, capitalization and competitive positions.
The key drivers of the increase in loss-cost assumptions are the increase in S&P's assumption for peak unemployment and the sharp rise in delinquent loans, the agency added.
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