Rating Recap: LandAmerica

August 23, 2007

Standard & Poor’s Ratings Services has revised its outlook on LandAmerica Financial Group Inc. (LFG) and its title insurance subsidiaries (collectively, LandAmerica) to negative from stable. S&P also affirmed its ‘BBB-‘ counterparty credit rating and senior debt rating on LFG and affirmed its ‘A-‘ counterparty credit and financial strength ratings on LandAmerica. In addition, S&P affirmed LFG’s preliminary ‘BB+’ subordinated debt and ‘BB’ preferred stock ratings. “The revised outlook reflects the challenging environment for all title insurers,” explained S&P credit analyst James Brender. “We believe mortgage originations will decline steadily between 2006 and 2009.” Consequently, operating performance for title insurers will be strained for at least the next six quarters. LandAmerica’s adjusted pretax profit margin is unlikely to exceed 5 percent in 2007 or 2008.

Source: S&P

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