PMI Rating Rallies from Junk
Mortgage insurer and credit enhancement solution provider PMI Group (PMI) late Tuesday saw its credit rating rebound from triple-C to single-B minus as Standard & Poor's removed the company from credit watch status to outlook stable. Its wholly owned subsidiary, PMI Mortgage Insurance, retained a double-B minus rating and stable outlook. The news marks the continuation of what started out a week of positive developments at the company. PMIs stock traded up 33% in early trading Monday after announcing an amended and restated credit agreement that substantially reduces the potential for covenant default by eliminating certain covenants present in the previous credit agreement. "We are pleased with Standard & Poor’s recognition of the positive benefits resulting from the execution of the amended agreement and the upgrade of our holding company ratings,” said chairman and CEO Steve Smith in a media statement Tuesday. 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.