Fitch upgrades rating on Old Republic, subsidiaries to ‘positive’

MADISON — Fitch Ratings has placed the ratings of Old Republic International Corporation’s (ORI) and its insurance company subsidiaries on rating watch positive. The ratings were previously on rating watch negative, where they had been placed Jan. 25, 2012.

The rating includes Mississippi Valley Title Insurance Company of Madison, an ORI subsidiary.

Fitch wrote in part: “The rating watch reflects ORI’s recently announced plan to spin off of its wholly owned subsidiary, Republic Financial Indemnity Group Inc. (RFIG). RFIG combines ORI’s mortgage insurance and consumer credit indemnity (CCI) lines. A successful spin-off would mitigate Fitch’s concern regarding a potential covenant breach under ORI’s debt obligations and eliminate the cash drain related to RFIG.

“Fitch anticipates that ORI’s debt rating will be upgraded to investment grade assuming the spin-off occurs as specified, and that subsidiary Insurer Financial Strength (IFS) ratings will likely be upgraded by one notch.

“Fitch plans to review ORI’s ratings following the completion of this transaction, which is expected to take place in mid-July.”