Mortgage insurer PMI soars 26 pct on amended credit agreement

(Reuters) - PMI Group Inc's (PMI.N) shares jumped as much as 26 percent on Monday, after the mortgage insurer said it had satisfied all conditions precedent necessary for an amended and restated credit agreement to become effective.

The amended agreement reduces the size of the credit facility to $125 million and eliminates certain financial covenants and events of default previously contained in the facility, PMI group said in a statement on Friday.

"This revolving credit agreement provides additional financial flexibility for PMI's holding company through its scheduled maturity in October, 2011," Chief Financial Officer Donald Lofe said.

Mortgage insurers like PMI and rivals Radian Group Inc (RDN.N) and MGIC Investment Corp (MTG.N) have suffered huge losses from backing subprime bonds and mortgages that saw a surge in defaults as U.S. credit and housing markets worsened.

Shares of the Walnut Creek, California-based PMI Group were trading up 41 cents at $2.15 Monday on the New York Stock Exchange. They earlier touched a high of $2.19.

(Reporting by Anurag Kotoky in Bangalore, Editing by Dinesh Nair)