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Fitch Assigns an 'A+' to PMI Group Senior Notes.

NEW YORK -- Fitch Ratings has assigned an 'A+' rating to $400 million of senior notes issued by The PMI Group, Inc. (TPG). The issue consists of $250 million of senior notes due 2016 and $150 million due 2036. TPG expects to use $360 million of the proceeds to refinance contingent convertibles debentures that became callable on July 15, 2006. Total debt outstanding will temporarily increase by approximately $40 million dollars until Nov. 15, 2006 when an additional $63 million of currently outstanding senior debt matures. Additionally, Fitch has affirmed TPG's 'A+' senior debt and long-term ratings and the 'A' rating assigned to the trust preferred securities of PMI Capital I. Fitch also affirmed the 'AA+' insurer financial strength (IFS) ratings of PMI Mortgage Insurance Co. (PMI), the primary mortgage insurance subsidiary of TPG. The Rating Outlook is Stable for all ratings. E[acute accent]PMI's ratings reflect the company's solid market position in the U.S. mortgage insurance industry, strong excess capital given the current rating, good credit performance of the insured portfolio, and solid financial returns over an extended period of time. The financial profile of the parent company, TPG, also derives diversity from international mortgage insurance operations and operations outside of mortgage insurance, primarily financial guaranty. E[acute accent]U.S. mortgage insurance operations comprised 66% of TPG's total net income as of the year-to-date period ending June 30, 2006. Like the majority of the U.S. mortgage insurance industry, earnings growth at TPG's mortgage insurance operations has been negatively impacted in the past few years by lessened demand for insurance as a result of the proliferation of 'mortgage insurance avoidance' products being offered in the marketplace, the majority of which are being provided by mortgage originators, PMI's primary customer base. E[acute accent]The PMI Group, Inc. (NYSE: PMI) headquartered in Walnut Creek, California is an international provider of credit enhancement products that promote homeownership and facilitate mortgage transactions in the capital markets. Through its wholly owned subsidiaries and unconsolidated strategic investments, TPG offers residential mortgage insurance and credit enhancement products domestically and internationally as well as financial guaranty insurance and reinsurance. As of June. 30, 2006, TPG reported consolidated total assets of $5.3 billion and total shareholders' equity of $3.3 billion.

E[acute accent]The following ratings are affected:

E[acute accent]The PMI Group, Inc.

E[acute accent]-- $63 million 6.75% senior notes due Nov. 15, 2006 Affirmed 'A+'/Stable;

E[acute accent]-- $345 million 5.568% senior notes due Nov. 15, 2008 Affirmed 'A+'/Stable;

E[acute accent]-- $250 million 6.00% senior notes due Sept. 15, 2016 Assigned 'A+'/Stable;

E[acute accent]-- $360 million 2.50% senior convertible debentures July 15, 2021 Affirmed 'A+'/Stable;

E[acute accent]-- $150 million 6.625% senior notes due Sept. 15, 2036 Assigned 'A+'/Stable;

E[acute accent]PMI Capital Trust I

E[acute accent]-- $52 million 8.309% trust preferred securities Feb. 1, 2027 Affirmed 'A'/Stable;

E[acute accent]PMI Mortgage Insurance Co.

E[acute accent]-- Insurer financial strength Affirmed 'AA+'/Stable.

E[acute accent]Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
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Publication:Business Wire
Geographic Code:1USA
Date:Sep 15, 2006
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