Fitch affirms PMA

Fitch Ratings said it has affirmed the issuer default rating and senior debt rating of PMA Capital Corp. at BB- and B+, respectively.

Fitch said it also has affirmed the insurer financial strength ratings of the three active primary insurance subsidiaries collectively referred to as PMA Insurance Group: Pennsylvania Manufacturers Association Insurance Co., Pennsylvania Manufacturers Indemnity Co. and Manufacturers Alliance Insurance Co. at BBB-.

Lastly, Fitch said it has also affirmed the B- insurance financial strength rating of PMA Capital Insurance Co.'s (PMA Re) run-off reinsurance subsidiary.

All outlooks are stable.

Fitch said the rating affirmation follows the Pennsylvania Department of Insurance's approval of a $73.5 million extraordinary dividend from PMA Re to PMA. Under the terms of its convertible notes indenture, $35 million will have to be used to buy back existing debt.

PMA has agreed with the insurance department to use the remaining proceeds to retire additional debt or to provide holding company liquidity.

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