Moody's downgrades MGIC Investment

Moody's Investors Service said it downgraded MGIC Investment Corp.'s senior unsecured debt to Caa1 from B3 and junior subordinated debt to Ca from Caa2.

The outlook is negative.

The downgrade was made in conjunction with the downgrade of Mortgage Guaranty Insurance Corp.'s and MGIC Indemnity Corp.'s insurance financial strength ratings to Ba3 from Ba2, which Moody's said reflects continued deterioration in MGIC's capital position caused by prolonged weakness in the performance of its insurance portfolio and more clarity about the group's contemplated restructuring.

The Caa1 rating of MGIC Investment reflects the agency's standard notching between non-investment-grade operating companies and holding companies. The agency said the rating also reflects that the holding company has a modest liquidity position and substantial near-term refinancing risk related to the debt coming due in 2011.

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