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S&P keeps Fidelity on watch
Standard & Poor's said its ratings on Fidelity National Financial Inc. (BBB) and its rated title insurance subsidiaries remain on CreditWatch with negative implications, where they were initially placed after the title operations reported a $146 million net operating loss for the third quarter.
The agency said the title insurance subsidiaries' pretax profits of $7 million for the fourth quarter of 2008 compared favorably with its expectations, but S&P still has concerns regarding the impact on mortgage originations of falling home prices and constrained credit.
In addition, Fidelity's recent acquisition of LandAmerica Financial Group Inc.'s title insurance operations creates some integration risk, but S&P said the acquisition could significantly improve the group's competitive position and long-term operating performance if management is successful in reducing the new operations' annual costs by $180 million.
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