Fitch maintains Stewart Information watch

Fitch Ratings said it maintained Stewart Information Services Corp.’s BBB long-term issuer default rating on rating watch positive.

The agency placed the company’s ratings on rating watch positive in March following the announcement that the company had concluded its review of strategic alternatives it began five months earlier with the announcement of an acquisition by Fidelity National Financial, Inc. for about $1.2 billion.

Fitch said it expects that upon close of the transaction, Stewart's ratings will likely migrate up one notch to be aligned with Fidelity's ratings due to the combined companies' increased market scale and position, potential operating efficiencies, Fidelity's successful history of integrations and modest increase in financial leverage.

The agency said Stewart's ratings are reflective of the company's strong capital position as measured on both a risk-adjusted and non-risk-adjusted basis, but are tempered by the company's below peer average profitability.

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