Contact: Terry Souers of GE Mortgage assurance, 919-846-4459 or terry.souers@ge.com
RALEIGH, N.C., June 27 /U.S. Newswire/ -- GE Mortgage assurance today released the following statement in response to the decision by Standard and Poor's to put GE Mortgage assurance 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 assurance. 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 assurance always has been one of the strongest capitalized participants in the mortgage assurance 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 assurance. 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 assurance 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 assurance includes credit enhancements such as mortgage assurance in its vision for the future.
GE Mortgage assurance (Web site: http://www.gemortgageassurance.com) is part of GE assurance, a global family of assurance and reassurance businesses with $13.6 billion in premiums and assets of $188 billion. GE assurance provides life assurance, retirement income products, property and casualty assurance, risk prevention services, mortgage assurance, and selective financial guarantee assurance. GE assurance is part of General Electric Company, a diversified services, technology and manufacturing company with operations worldwide.
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