Fitch Ratings plans to withdraw the ratings on Old Republic International Corporation
The reason for today's price drop:
The following is a press release from Fitch Ratings :
Fitch Ratings-Chicago- 03 July 2014 : Fitch Ratings plans to withdraw the ratings on Old Republic International Corporation and its subsidiaries on or about Aug. 3, 2014 , for commercial reasons. Fitch currently rates Old Republic International Corporation and its subsidiaries as follows:
Old Republic International Corp. :
--Issuer Default Rating (IDR) at 'BBB';
-- $550 million 3.75% senior notes due March 15, 2018 at 'BBB-'.
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 (IFS) at 'A'.
The Rating Outlook is Stable.
Fitch reserves the right in its sole discretion to withdraw or maintain any rating at any time for any reason it deems sufficient. Fitch believes that investors benefit from increased rating coverage by Fitch and is providing approximately 30 days' notice to the market on the withdrawal of Old Republic International Corporation and its subsidiaries ratings as a courtesy to investors.
Fitch's last rating action occurred on April 23, 2014 , at which time Fitch upgraded its ratings on Old Republic International Corporation and its subsidiaries.
Fitch Ratings, Inc.
It's not a downgrade. It sounds as if Fitch doesn't see the economic benefit of providing the ratings. But maybe it was interpreted as a downgrade. I don't know why the stock fell back to the 16.50 area. In the absence of any other news, I see it as a buying opportunity.
While I do understand that with so many subsidiaries ORI is a complex company to analyze thoroughly and Fitch may have viewed this as a bad cost/benefit exercise, I think there may be more to this downslide than is apparent. The 2nd Q results may miss analyst forecasts, and, the housing market has gotten weak.