GE Mortgage Insurance issues statement
on S&P credit watch action
Contact: Terry Souers of
GE Mortgage Insurance, 919-846-4459 or terry.souers@ge.com
RALEIGH, N.C., June 27 /U.S. Newswire/ -- GE Mortgage Insurance today
released the following statement in response to the decision by Standard
and Poor's to put GE Mortgage Insurance on CreditWatch:
S&P made its decision despite the fact that our capital position has never
been stronger.
The S&P action is based on a change in S&P's rating methodology, not on
any change in the financial condition of GE Mortgage Insurance. S&P noted
that changes within its rating criteria "now limit the rating support for
a strategically important subsidiary to one notch below the parent's
rating" unless there is a significant explicit support agreement from a
higher rated parent. We believe we have such an agreement from GE Capital,
which is rated AAA by Standard & Poor's. Our implicit and explicit support
from GE Capital has not changed.
GE Mortgage Insurance always has been one of the strongest capitalized
participants in the mortgage insurance industry and continues to hold
capital well in excess of S&P "AAA" requirements. In fact, we have
operated with the lowest Risk to Capital Ratio (the industry measure of
capitalization given a company's portfolio of risk) in the industry for
the last five years.
The other two rating
agencies, Moody's and Fitch, continue to recognize the unmatched financial
strength of GE Mortgage Insurance. Both agencies recently reaffirmed their
ratings for the company at "AAA," their highest levels.
We appreciate the fact that Standard & Poor's sees GE Mortgage Insurance
as having "strong fundamentals" and "very strong earnings and market
position, extremely strong capitalization, and deep and experienced
management." Those factors make it clear why GE Insurance includes credit
enhancements such as mortgage insurance in its vision for the future.
GE Mortgage Insurance (Web site: http://www.gemortgageinsurance.com) is
part of GE Insurance, a global family of insurance and reinsurance
businesses with $13.6 billion in premiums and assets of $188 billion. GE
Insurance provides life insurance, retirement income products, property
and casualty insurance, risk prevention services, mortgage insurance, and
selective financial guarantee insurance. GE Insurance is part of General
Electric Company, a diversified services, technology and manufacturing
company with operations worldwide.
