WALNUT CREEK, Calif., May 8 /PRNewswire-FirstCall/ -- The PMI Group, Inc. (the "Company") today announced that it has reached an agreement with the lenders under its revolving credit facility on the terms and conditions of an Amended and Restated Credit Agreement (the "Amended Agreement") that would replace the existing credit facility agreement in its entirety. The Amended Agreement will become effective if certain conditions precedent are satisfied no later than May 29, 2009. If it becomes effective, the Amended Agreement will reduce the size of the facility to $125 million and eliminate certain financial covenants and events of default currently contained in the facility, including the elimination of the maximum total debt to total capitalization percentage and maximum risk to capital ratio covenants and elimination of the financial strength ratings event of default. The Amended Agreement would also revise the minimum Adjusted Consolidated Net Worth (as defined in the credit facility) requirement to not less than $1.2 billion through June 30, 2009, $700 million from July 1, 2009 through December 31, 2009, and $500 million from January 1, 2010 through the maturity date of the facility of October 24, 2011.
Conditions precedent to the effectiveness of the Amended Agreement include the sale to the Company by PMI Mortgage Insurance Co. ("PMI") of the contingent note (the "Note") received by PMI in connection with the sale of PMI Australia, the termination of the existing pledge to the lenders of the capital stock of PMI, the pledge by the Company to the lenders of the Note, and the Company's repayment of its borrowing under the facility to $125 million. Satisfaction of certain conditions precedent will require the consent of third parties and regulatory approval, and there can be no assurance that such consents and approval will be obtained by May 29, 2009. Whether the Company has satisfied the conditions precedent is within the sole discretion of the lenders.
If the Company is unable to satisfy the conditions precedent necessary for the Amended Agreement to become effective on or before May 29, 2009, then, unless the suspension of certain of the covenants and event of default is extended beyond May 29, 2009, an event of default under the facility will occur on May 30, 2009. Upon an event of default, the Company would likely be required to repay all outstanding indebtedness under the facility and the lenders would have the right to terminate their loan commitments under the facility. The Company currently has sufficient funds to repay the credit facility.
About The PMI Group, Inc.
The PMI Group, Inc. , headquartered in Walnut Creek, CA provides credit enhancement solutions that expand homeownership while supporting our customers and the communities they serve. Through its wholly and partially owned subsidiaries, PMI offers residential mortgage insurance and credit enhancement products. For more information: http://www.pmi-us.com/.
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The PMI Group, Inc.
CONTACT: Investors, Bill Horning of The PMI Group, Inc.,
+1-925-658-6193, or Media, Tom Taggart of The PMI Group, Inc.,
+1-925-658-6511
Web Site: http://www.pmi-us.com/