CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has revised the Rating Watch status for Old Republic International Corporation (ORI) and its insurance company subsidiaries to Negative from Positive, following the company's announcement to withdraw the spin-off of Republic Financial Indemnity Group, Inc. (RFIG). A complete list of ratings is provided at the end of this release.

Fitch had most recently placed the ratings on Rating Watch Positive on March 23, 2012 after ORI's announced plan to spin off of its wholly owned subsidiary, RFIG. RFIG was formed to combine ORI's troubled mortgage insurance unit and its consumer credit indemnity (CCI) lines. The spin-off was withdrawn due to what management reported as 'objections raised by certain stakeholders.'

A successful spin-off would have mitigated Fitch's concern regarding a potential subsidiary collateral covenant breach under ORI's debt obligations and eliminated any future cash drain related to RFIG. ORI's debt is subject to acceleration if any of its significant subsidiaries experience bankruptcy, insolvency, rehabilitation or reorganization.

Renewed uncertainty regarding the ultimate long-term solution for the mortgage insurance business, as well as the renewed potential for a debt covenant breach, support today's action.

On Jan. 30, 2012, Fitch had downgraded ORI's senior debt rating by three notches and placed the ratings on Rating Watch Negative when the agency's concerns first surfaced as to a possible future covenant breach. Today's action effectively returns the Rating Watch status to that in effect prior to the March 2012 RFIG formation announcement.

Fitch has placed the following ratings on Rating Watch Negative:

Old Republic International Corp.

--IDR 'BB';

--$550 million 3.75% senior notes due March 15, 2018 'BB-'.

Bituminous Casualty Corp.

Bituminous Fire & Marine Insurance Co.

Great West Casualty Co.

Old Republic Insurance Co.

Old Republic Lloyds of Texas

Old Republic General Insurance Co.

Old Republic Surety Co.

Manufacturers Alliance Insurance Co.

Pennsylvania Manufacturers' Association Insurance Co.

Pennsylvania Manufacturers Indemnity Co.

American Guaranty Title Insurance Co.

Mississippi Valley Title Insurance Co.

Old Republic National Title Insurance Co.

--Insurer Financial Strength 'A-'.

Additional information is available at 'www.fitchratings.com'. The company did not participate in the rating process except through public information. The ratings above were unsolicited and have been provided by Fitch as a service to investors.

Applicable Criteria & Related Research:

--'Insurance Rating Methodology' (Sept. 22, 2011).

Applicable Criteria and Related Research:

Insurance Rating Methodology

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=651018

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Fitch Ratings
Brian Bertsch, +1-212-908-0549
Media Relations, New York
brian.bertsch@fitchratings.com
or
Primary Analyst:
Dafina M. Dunmore, CFA, +1-312-368-3136
Director
Fitch, Inc.
70 W. Madison Street
Chicago, IL 60602
or
Secondary Analyst:
Doug M. Pawlowski, CFA, +1-312-368-2054
Senior Director
or
Committee Chairperson:
Keith M. Buckley, CFA, +1-312-368-3211
Managing Director

Source: Fitch Ratings