Fitch Ratings upgraded Radian Guaranty Inc.'s Insurer Financial Strength (IFS) rating to 'A' (Strong) from 'A-', and Radian Group Inc.'s Long-Term Issuer Default Rating (IDR) to 'BBB+' from 'BBB'. The company's senior debt ratings were also upgraded to 'BBB' from 'BBB-', with a Stable Outlook. These upgrades reflect an improved company profile and enhanced competitive positioning.
The rating action was driven by a reduction in Radian Group's financial leverage ratio, which stood at a moderate 17.8% as of September 30, 2024, down from 23.1% at year-end 2023. This decline resulted from a 25% reduction in debt, including the issuance of $625 million in senior notes in February 2024 and the redemption of $525 million and $450 million senior notes. Radian Guaranty's PMIERs coverage remained very strong at 155% as of September 30, 2024.
Fitch highlighted Radian's very strong operating results, with a GAAP combined ratio of 25.4% for the first nine months of 2024, benefiting from favorable reserve development and increased net investment income. The company's strong capitalization and material holding company liquidity of $844 million further supported the upgrades, indicating a robust financial position.
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