CMG MI's operating performance has remained negative, failing to meet our expectations. We are lowering our rating on CMG MI to 'BBB-' from 'BBB'. The negative outlook reflects our expectation of ongoing operating losses. On Oct. 1, 2012, Standard&Poor's Rating Services lowered its long-term financial strength and counterparty credit ratings on CMG Mortgage Insurance Co. (CMG MI) to 'BBB-' from 'BBB'. The outlook is negative. The downgrade is a result of sustained operating losses at CMG MI (on a consolidated basis with its reinsurance affiliate, CMG Mortgage Reinsurance Co. ) and the increasing risk-to-capital ratio. Although CMG MI's operating losses through the first half of 2012 are less than in prior periods, and performance remains favorable compared with
