Best Places PMA Capital and Subs Ratings under Review/Positive

June 14, 2010

A.M. Best Co. has placed under review with positive implications the issuer credit rating (ICR) of “bbb-” and debt ratings of PMA Capital Corporation of Blue Bell, PA, following the announcement that PMA Capital and Chicago-based Old Republic International Corporation have entered into a merger agreement, pursuant to which Old Republic will acquire all of PMA Capital’s outstanding stock [See IJ web site –].

Best also placed the financial strength rating (FSR) of A- (Excellent) and ICRs of “a-” of The PMA Insurance Group and its pooled members under review with positive implications.

Best said it took the rating actions following the announcement of the “stock purchase transaction in which PMA Capital will be integrated into Old Republic, whose primary property/casualty operating companies are currently rated higher than PMA Capital.”

Best said it also expects that “with the close of the transaction, PMA will receive certain explicit support from Old Republic, while achieving greater scale and eliminating costs associated with being a public company.

Best summarized the companies and the ratings affected as follows:
The FSR of A- (Excellent) and ICRs of “a-“have been placed under review with positive implications for PMA Insurance Group and its following members
Manufacturers Alliance Insurance Company
Pennsylvania Manufacturers’ Association Insurance Company
Pennsylvania Manufacturers Indemnity Company

The following debt ratings have been placed under review with positive implications:
PMA Capital Corporation—
— “bbb-” on $54.9 million 8.5 percent senior unsecured note, due 2018
— “bbb-” on $45,000 4.25 percent senior unsecured convertible debentures, due 2022
— “bb+” on $64.44 million variable rate junior subordinated debt, due 2033
— “bbb” on $10.0 million variable rate surplus note, due 2035

Source: A.M. Best

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