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Fitch Affirms `AA+' IFS Rtg On Mortgage Guaranty Insurance Corp.

Business Editors

NEW YORK--(BUSINESS WIRE)--July 10, 2001

Fitch affirms the `AA+' Insurer Financial Strength (IFS) rating of Mortgage Guaranty Insurance Corporation (MGIC).

Fitch also issues `AA-` long-term and senior debt ratings of MGIC Investment Corporation (MGIC Investment). The Rating Outlook is Stable.

The rating reflects MGIC's strength as a leader in the mortgage insurance marketplace with consistent profitability and a high quality investment portfolio. The experience of MGIC's management team is reflected in the sound quality of its insured portfolio with good geographic diversification. The rating also reflects that MGIC meets the stringent capital adequacy standards determined by Fitch's mortgage insurance risk-based capital stress model at the `AA+' level. The model assesses an insurer's ability to meet projected claims payment obligations over the course of a protracted national economic downturn.

MGIC has produced sound profitable results as reflected by a return on adjusted statutory capital of 19.7% for 2000. The insurer's balance sheet quality and liquidity, similar to its mortgage insurance company peers, are very strong. MGIC has benefited from favorable market conditions which combined with disciplined underwriting have contributed to the mortgage insurer's low loss ratio of 10.3% and low loan default rate of 2.16%, excluding subprime loans.

At Dec. 31, 2000, MGIC reported statutory total assets of $4.4 billion and statutory capital (policyholder surplus and contingency reserves) of $3.6 billion. MGIC's direct primary insurance in force at year-end 2000 was $160.2 billion. The mortgage insurer's risk to capital ratio was 10.6:1 at Dec. 31, 2000, well below statutory maximum level of 25:1 and favorable in comparison to peer levels.

MGIC, domiciled in Milwaukee, WI, is the principal subsidiary of MGIC Investment and the leading provider of residential mortgage insurance in the US. The insurer is licensed in all 50 states and Puerto Rico to provide mortgage insurance coverage. In its role as mortgage insurer, MGIC is called upon to protect mortgage lenders and investors from losses due to borrower defaults on mortgage loans. As of Dec. 31, 2000, MGIC Investment reported total assets of $3,858 million and shareholder equity of $2,465 million.

Entity/Issue/Type Action Rating/Outlook

Mortgage Guaranty Insurance Corporation (MGIC)
-- Insurer financial strength Affirmed `AA+'/Stable

MGIC Investment Corporation (MGIC Investment)
-- Long-term issuer Assigned `AA-'/Stable
-- 7.5% Senior notes (2005) Assigned `AA-'/Stable
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Publication:Business Wire
Geographic Code:1USA
Date:Jul 10, 2001
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