S&P Affirms Radian Asset Assurance's AA Rating and Revises its Outlook Upward to Stable
29 Juin 2006 - 7:19PM
PR Newswire (US)
Report Cites Enhanced Underwriting and Risk Management and
Improving Results in Double-A Niche PHILADELPHIA, June 29
/PRNewswire-FirstCall/ -- Radian Group Inc. (NYSE:RDN), a global
credit risk management company, today announced that Standard &
Poor's has affirmed the AA financial strength rating, and revised
upward its outlook to stable for Radian Asset Assurance Inc.,
Radian's financial guaranty subsidiary. Reflecting the improved
outlook for Radian Asset Assurance, S&P also revised upward to
stable its outlook on Radian Group, while affirming its A credit
rating. In announcing its decision earlier today, S&P said the
stable outlook for the financial guaranty subsidiary reflects: *
Enhancements made to its underwriting and risk management areas *
Improving production results in its niche financial guaranty
sectors * Appropriate capitalization * A supportive parent company
S.A. Ibrahim, chief executive officer of Radian, said, "We are
gratified by S&P's decision and believe it reflects Radian's
significant achievements of the past year - most notably our
strengthened risk management culture and our ability to demonstrate
the viability of the unique and growing double-A market niche."
Financial guaranty represents approximately 22 percent of Radian's
overall business. In 2005, gross par insured increased for all
product lines, totaling $24.7 billion, up 72% from $14.3 billion in
2004, and strong production continued in the first quarter of 2006.
"Importantly, the company achieved this growth while continuing to
apply pricing discipline as well as focusing on higher credit
quality business with a superior risk-reward profile," said Stephen
Cooke, president of Radian Asset Assurance. Mr. Ibrahim added that
S&P's stable outlook is an important factor for Radian Asset
Assurance because it reduces market uncertainty and allows Radian
to maximize the full potential of its financial guaranty business.
Specifically, he said the company would continue to evaluate
opportunities to develop new sectors, asset classes and geographic
areas; optimize its business mix between direct insurance and
reinsurance; capitalize on the rapidly growing synthetic market;
and further strengthen its business position with its clients,
counterparties and investors. "We are confident in the direction of
our financial guaranty business," Mr. Ibrahim said, also noting the
unique synergies between Radian's financial guaranty and mortgage
insurance businesses, which allow the company to create innovative
client solutions and better manage its own mortgage risk. "We
firmly believe we have the right strategy, at the right pace, to
achieve the desired results," he noted. "S&P's decision
reaffirms this belief." S&P's revised rating also applies to
Radian Asset Assurance Limited, an insurance subsidiary of Radian
Asset Assurance authorized to conduct financial guaranty business
in the U.K. S&P's financial strength ratings for Radian's
mortgage insurance subsidiaries continue at AA with a stable
outlook. About Radian Group Inc. Radian Group Inc. is a global
credit risk management company headquartered in Philadelphia with
significant operations in both New York and London. Radian develops
innovative financial solutions by applying its core mortgage credit
risk expertise and structured finance capabilities to the credit
enhancement needs of the capital markets worldwide, primarily
through credit insurance products. The company also provides credit
enhancement for public finance and other corporate and consumer
assets on both a direct and reinsurance basis and holds strategic
interests in active credit-based consumer asset businesses.
Additional information may be found at http://www.radian.biz/. All
statements made in this news release that address events or
developments that we expect or anticipate may occur in the future
are "forward-looking statements" within the meaning of Section 27A
of the Securities Act of 1933, Section 21E of the Securities
Exchange Act of 1934 and the U.S. Private Securities Litigation
Reform Act of 1995. These statements are made on the basis of
management's current views and assumptions with respect to future
events. The forward-looking statements, as well as Radian's
prospects as a whole, are subject to risks and uncertainties,
including the following: changes in general financial and political
conditions such as extended national or regional economic
recessions (or expansions), changes in housing values, population
trends and changes in household formation patterns, changes in
unemployment rates, and changes or volatility in interest rates;
changes in investor perception of the strength of private mortgage
insurers or financial guaranty providers, and risks faced by the
businesses, municipalities or pools of assets covered by Radian's
insurance; the loss of a customer with whom Radian has a
concentration of its insurance in force; increased severity or
frequency of losses associated with certain Radian products that
are riskier than traditional mortgage insurance and municipal
guaranty insurance policies; material changes in persistency rates
of Radian's mortgage insurance policies; downgrades of Radian's
credit ratings or the insurance financial-strength ratings assigned
by the major ratings agencies to Radian's operating subsidiaries;
heightened competition from other insurance providers and from
alternative products to private mortgage insurance and financial
guaranty insurance; changes in the charters or business practices
of Fannie Mae and Freddie Mac; the application of federal or state
consumer- lending, insurance and other applicable laws and
regulations, or unfavorable changes in these laws and regulations
or the way they are interpreted, including: (i) the possibility of
private lawsuits or investigations by state insurance departments
and state attorneys general alleging that services offered by the
mortgage insurance industry, such as captive reinsurance, pool
insurance and contract underwriting, are violative of the Real
Estate Settlement Procedures Act and/or similar state regulations
(particularly in light of public reports that some state insurance
departments are investigating captive reinsurance arrangements used
in the mortgage insurance industry), or (ii) legislative and
regulatory changes affecting demand for private mortgage insurance
or financial guaranty insurance; the possibility that we may fail
to estimate accurately the likelihood, magnitude and timing of
losses in connection with establishing loss reserves for our
mortgage insurance or financial guaranty businesses or to estimate
accurately the fair value amounts of derivative financial guaranty
contracts in determining gains and losses on these contracts;
changes in accounting guidance from the SEC or the Financial
Accounting Standards Board regarding income recognition and the
treatment of loss reserves in the mortgage insurance or financial
guaranty industries; changes in claims against mortgage insurance
products resulting from the aging of Radian's mortgage insurance
policies; vulnerability to the performance of Radian's strategic
investments; changes in the availability of affordable or adequate
reinsurance for our non-prime risk; and international expansion of
our mortgage insurance and financial guaranty businesses into new
markets and risks associated with our international business
activities. For more information regarding these risks and
uncertainties, as well as certain additional risks that we face,
investors should refer to the risk factors detailed in Part I, Item
1A in our annual report on Form 10-K for the year ended December
31, 2005. We caution you not to place undue reliance on these
forward-looking statements, which are current only as of the date
of this news release. Radian does not intend to and disclaims any
duty or obligation to update or revise any forward-looking
statements made in this news release to reflect new information,
future events or for any other reason. DATASOURCE: Radian Group
Inc. CONTACT: For investors: Mona Zeehandelaar, +1-215-231-1674, ,
For the media: Corporate Communications, +1-888-NEWS-520, , both of
Radian Group Web site: http://www.radian.biz/
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