Moody's sees "broad based improvements" in the credit profiles of U.S. mortgage insurers and has upgraded the ratings of a number of companies in the sector.
The rating agency said mortgage insurers have reported "strong net income" and have boosted their capital adequacy with organic capital growth and increased use of insurance-linked securities.
Moody's upgraded Radian Group Inc. subsidiary Radian Guaranty Inc.'s insurance financial strength rating to Baa1 from Baa2. The upgrade mirrors the company's reduced financial leverage and the extension of its debt maturity profile.
The insurance financial strength rating of NMI Holdings Inc. unit National Mortgage Insurance Corp. was upgraded to Baa2 from Baa3, reflecting improvements to the company's overall credit profile, even as it continues scaling its U.S. mortgage insurance platform.
The insurance financial strength rating of Essent Guaranty Inc., the primary U.S. mortgage insurance operating subsidiary of Essent Group Ltd., was upgraded to A3 from Baa1. Moody's said the new rating was reflective of Essent's strong overall credit profile and top-tier position in the U.S. mortgage insurance market.
Additionally, Moody's upgraded the insurance financial strength ratings of Mortgage Guaranty Insurance Corp. and MGIC Indemnity Corp. to Baa1 from Baa2, due to their reduced financial leverage and good debt maturity profile. The companies are subsidiaries of MGIC Investment Corp.