NMI Holdings, Inc. Receives Ratings Upgrade from Moody’s Investors Service
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Insights
The upgrade of NMI Holdings, Inc.'s principal operating subsidiary, National Mortgage Insurance Corporation, by Moody's Investors Service is a significant event that reflects positively on the company's financial health and market position. The upgrade to an 'A3' insurance financial strength rating indicates a strong ability to meet ongoing insurance obligations, which is crucial for maintaining confidence among policyholders and investors. Similarly, the elevation of the senior notes to 'Baa3' suggests a moderate credit risk and generally favorable investment attributes.
This upgrade could lead to reduced borrowing costs and improved terms for future debt issuance. It also signals to investors that the company has a solid risk management framework, evidenced by its high-quality insured portfolio and industry-leading credit performance. In the long term, the company's comprehensive reinsurance program and robust financial position could provide a buffer against market volatility, further solidifying its competitive stance in the U.S. mortgage insurance market.
The mortgage insurance sector is integral to the housing finance ecosystem and National MI's upgraded rating may have broader implications for the industry. A higher rating from Moody's typically reflects not only the company's operational efficiency and financial fortitude but also its strategic positioning within the market. National MI's mention of a 'fully scaled and efficient operating platform' suggests that it has achieved economies of scale that could provide a competitive edge over rivals.
Investors should note that the stable outlook accompanying the upgrades implies a steady performance expectation, which might influence investor sentiment positively. However, it's important to monitor the company's future earnings and risk exposure to ensure that the performance aligns with Moody's assessment. Additionally, the emphasis on a high-quality insured portfolio and use of risk-transfer solutions could be a differentiator that sets National MI apart from competitors, potentially impacting market share dynamics.
The credit rating upgrade comes at a time when the U.S. economy and housing market are experiencing fluctuations due to various macroeconomic factors. A strong rating can be a bellwether for the mortgage insurance industry's resilience in the face of economic headwinds. National MI's position as a leader in the private mortgage insurance market, combined with a robust balance sheet, suggests that it may be well-equipped to navigate potential economic downturns or housing market corrections.
The stable outlook indicates that Moody's expects National MI to maintain its solid market position and financial strength, which could be reassuring to stakeholders concerned about economic uncertainty. While this upgrade is a positive development, it is essential to contextualize it within broader economic trends, including interest rates, housing demand and regulatory changes, which could all impact the company's performance and the mortgage insurance sector as a whole.
EMERYVILLE, Calif., Jan. 31, 2024 (GLOBE NEWSWIRE) -- NMI Holdings, Inc. (Nasdaq: NMIH) today announced that Moody’s Investors Service (“Moody’s”) has upgraded the insurance financial strength rating of its principal operating subsidiary, National Mortgage Insurance Corporation (“National MI”) to “A3” and upgraded the company’s outstanding senior notes due June 1, 2025 to “Baa3.” Both ratings carry a stable outlook.
Moody’s rationale in support of the upgrade includes National MI’s solid position in the U.S. mortgage insurance market, fully scaled and efficient operating platform, high-quality insured portfolio, industry-leading credit performance, comprehensive reinsurance program, and robust financial position.
“We’re pleased to have received these upgrades from Moody’s,” said Adam Pollitzer, President and Chief Executive Officer. “National MI leads the private mortgage insurance market with our uniquely high-quality insured portfolio, comprehensive use of risk-transfer solutions, and best-in-class credit performance. We have a robust balance sheet supported by the significant earnings power of our platform, and are well-positioned to continue delivering differentiated value and counterparty support for our customers and other important stakeholders.”
About NMI Holdings, Inc.
NMI Holdings, Inc. (NASDAQ: NMIH), is the parent company of National Mortgage Insurance Corporation (National MI), a U.S.-based, private mortgage insurance company enabling low down payment borrowers to realize home ownership while protecting lenders and investors against losses related to a borrower's default. To learn more, please visit www.nationalmi.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act”), the U.S. Private Securities Litigation Reform Act of 1995, or in releases made by the U.S. Securities and Exchange Commission (“SEC”), all as may be amended from time to time. Forward-looking statements are statements about future, not past, events and rely on a number of assumptions concerning future events and involve certain important risks and uncertainties, any of which could cause our actual results to differ materially from those expressed in our forward-looking statements. Forward-looking statements in this press release include, without limitation, statements regarding National MI’s positioning for its future performance. More information about the risks, uncertainties and assumptions affecting National MI include, but are not necessarily limited to, the risk factors and forward-looking statements cautionary language contained in our Annual Report on Form 10-K and in other filings made with the SEC. We do not undertake, and specifically disclaim, any obligation to revise any forward-looking statements to reflect the occurrence of future events or circumstances.
Investor Contact
John M. Swenson
Vice President, Investor Relations & Treasury
John.Swenson@NationalMI.com
(510) 788-8417
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