PMI Mortgage Insurance Co. A- Rating Reaffirmed by S&P

WALNUT CREEK, Calif., Oct. 7 /PRNewswire-FirstCall/ -- The PMI Group, Inc. (NYSE: PMI) (the Company) today announced that Standard & Poor's (S&P) has reaffirmed its A- rating of PMI Mortgage Insurance Co. (PMI U.S.). S&P also affirmed the ratings of PMI Mortgage Insurance Company Limited (PMI Europe) at A- and the senior debt rating of the holding company at BBB- and the junior subordinated debt rating at BB. The CreditWatch was removed from all ratings and the rating outlook is negative. PMI U.S. remains an eligible mortgage insurer for both Fannie Mae and Freddie Mac. As of June 30, 2008, PMI's combined U.S. mortgage insurance companies had liquid assets of $2.3 billion.

Since March 2008, the Company has completed the following strategic and business initiatives:

    -- Signed a definitive agreement for the sale of PMI Australia
    -- Signed a definitive agreement for the sale of PMI Asia
    -- Repatriated approximately $150 million of excess capital from PMI
       Guaranty to PMI
    -- Began the closure of PMI Canada with plans to repatriate $60 million of
       capital to the U.S. mortgage insurance operations
    -- Announced the reconfiguration of PMI Europe to reduce expenses and
       preserve capital
    -- Renegotiated PMI's revolving credit facility
    -- Borrowed $200 million from the revolving credit facility
    -- Reduced our common stock dividend

PMI continues to work closely with each of the ratings agencies to communicate its financial strength, capital initiatives, and value proposition.

The ratings of CMG Mortgage Insurance Company and PMI Australia were not affected by this action and remain at AA- for both companies.

The PMI Group, Inc.

The PMI Group, Inc. (NYSE: PMI), headquartered in Walnut Creek, CA, provides innovative credit, capital, and risk transfer solutions that expand homeownership and fund essential services for our customers and the communities they serve. Through its wholly and partially owned subsidiaries, PMI offers residential mortgage insurance and credit enhancement products. For more information: http://www.pmigroup.com.

Cautionary Statement: Statements in this press release that are not historical facts, or that relate to future plans, events or performance are "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Readers are cautioned that forward-looking statements by their nature involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Many factors could cause actual results and developments to differ materially from those expressed or implied by forward-looking statements. Such factors include, among others, national or regional recessions, and further deterioration in the housing, mortgage and related credit markets. In particular, declines in housing values and/or housing demand, deterioration of borrower credit, higher unemployment rates, changes in interest rates, higher levels of consumer credit, higher mortgage default and claim rates, lower cure rates, higher claim sizes, the aging of our mortgage insurance portfolios, adverse changes in liquidity in the capital markets, the inability of loan servicers to process higher volumes of delinquent loans, and the contraction of credit markets could negatively affect our losses, loss reserves and paid claims. Future ratings downgrades, if any, may negatively impact us in a variety of ways and could, in isolation or taken together, negatively affect, among other things, our U.S. and international business prospects and revenues, our ability to compete in the U.S. and internationally, our GSE eligibility status in the U.S., the cost of and/or availability of financing, our consolidated financial condition, and our results of operations and cash flows. We will likely need to raise significant amounts of capital. Given current market conditions generally and in our industry, there can be no assurance that we will be able to consummate any capital raising transactions on favorable terms, or at all. Other risks and uncertainties are discussed in our SEC filings, including our Annual Report Form 10-K for the year ended December 31, 2007 (in Item 1A) and Form's 10-Q's for the quarters ended March 31, 2008 and June 30, 2008. We undertake no obligation to update forward-looking statements

SOURCE The PMI Group, Inc.