Moody's downgrades MGIC

Moody's Investors Service said it downgraded the insurance financial strength rating of Mortgage Guaranty Insurance Corp. to B2 from B1.

At the same time, Moody's downgraded the senior debt rating of Mortgage Guaranty's parent company, MGIC Investment Corp., to Caa3 from Caa2.

All ratings are on review for further downgrade.

Moody's said the downgrade is due to the continued deterioration of the insurer's regulatory capital position and to reflect the possible adverse credit implications of its ongoing dispute with Freddie Mac, one of its largest counterparties.

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