Mortgage Insurer's Stock Rises on Amended Agreement
Stock of mortgage insurer PMI Group (PMI) spiked more than 33% at one point in early trading today on the heels of some positive news out of the company. PMI met the conditions necessary to reach an amended and restated credit agreement that reduces the size of the credit facility to $125m and eliminates certain financial covenants and events of default previously contained in the facility. "We are pleased to...continue our strong relationship with our syndicate of lenders, despite a difficult credit market," CFO Donald Lofe Jr. said in a media statement today. "This revolving credit agreement provides additional financial flexibility for PMI's holding company through its scheduled maturity in October, 2011." Bank of America (BofA) acts as the facility's administrative agent, while the lender group comprises BofA, Goldman Sachs Lending Partners (GS), JP Morgan Chase Bank (JPM) and Bank of New York Mellon (BK), among others. The announcement comes weeks after PMI posted a Q109 loss of $115.3m, or $1.41 per share, from continuing operations, driven primarily by higher-than-expected negative earnings and loss adjustment expenses in its US mortgage insurance operations. Write to Diana Golobay. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments.