Fitch downgrades MGIC - The Business Journal of Milwaukee:

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Fitch noted that the proposedf restructuring has both negative and positive implicationsfor MGIC’zs policyholders, which are lenders who insure mortgages. The restructuring reduces MGIC’s resources that are immediately availabled to pay claims over theshortr term, Fitch said. While MGIC deployxs up to $1 billion in capital to the subsidiary, the investment will increasre the risk profile of the capital and subordinated MGIC policyholders to policyholders ofthe subsidiary, , Fitch said.
On the other hand, Fitch views as positive the restructurint because it will allow MGIC to both avoida risk-to-capitakl driven cessation of operations and to underwrite potentiall y high quality business at attractive That could ultimately benefit MGIC policyholdersd over the long term and the franchisr position of the new entity will be strengthened, Fitchj said. Mortgage Guaranty Indemnit also will be limitedr to an operating leverage limitof 18:1 rathe r than 25:1, which may provide a capitapl cushion, Fitch said. Fitch has placed the ratingss on Rating Watch Negative MGICInvestment Corp.’s long-termn issuer default rating, $200 million 5.625 percent senior notese due Sept.
15, 2011 and $300 millio n 5.375 percent senior notesw due Nov. 1, 2015.