Ratings Roundup: PMA, Radian

September 26, 2007

Fitch Ratings has upgraded the Issuer Default Rating (IDR) and senior debt rating of PMA Capital Corp. to ‘BBB-‘ from ‘BB-‘ and to ‘BB+’ from ‘B+’ respectively. Fitch also upgraded the Insurer Financial Strength (IFS) ratings of the three active primary insurance subsidiaries collectively referred to as PMA Insurance Group, (PMAIG): Pennsylvania Manufacturers Association Insurance Company (PMAIC); Pennsylvania Manufacturers Indemnity Company (PMIC); and Manufacturers Alliance Insurance Company (MAIC) to ‘BBB+’ from ‘BBB-.’ Lastly, Fitch affirmed the ‘B-‘ IFS rating of PMA Capital Insurance Company’s (PMA Re) run-off reinsurance subsidiary. The outlook on all of the ratings is stable. Fitch said its “upgrade of PMA’s ratings reflect a restoration of franchise value, a significant decrease in obligations at the run off operations, and an improved holding company capital structure and liquidity profile. These factors have strengthened PMA’s competitive position and thus improved the organization’s risk profile.”

Standard & Poor’s Ratings Services has removed Radian Group Inc. and its mortgage insurance subsidiaries (Radian MI) from CreditWatch with negative implications. S&P also affirmed its ‘AA’ counterparty credit and financial strength ratings on all the mortgage insurance companies, as well as its ‘A’ counterparty credit rating on Radian Group Inc. The rating outlook, however, is negative. S&P explained that the ratings had been placed on CreditWatch on Aug. 7, 2007, after MGIC Investment Corp. announced it was not obligated to complete its merger with Radian.” S&P credit analyst James Brender explained that the “primary reason for the CreditWatch placement was Standard & Poor’s concerns regarding Radian MI’s operating performance, which deteriorated significantly in the second quarter.”

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