UPDATE 1-PMI says has sufficient capital to pay claims

(Recasts, adds details)

April 8 (Reuters) - PMI Group (PMI.N: Quote, Profile, Research) said it has sufficient capital to pay insurance claims on default loans, after Standard & Poor's cut its counterparty credit rating on the mortgage insurer.

Counterparty credit rating evaluates the creditworthiness of both public and private companies -- whether or not the rated company issues in the public debt markets.

Mortgage insurers have incurred huge losses in the recent past as borrowers have missed payments on loans they insured.

"PMI's capital position and the resources we have available to pay claims have not been affected by S&P's ratings decisions," Chief Executive Steve Smith said.

Standard & Poor's cut its counterparty credit rating on four U.S. mortagage insurers, including Radian Group Inc (RDN.N: Quote, Profile, Research) and MGIC Investment Corp (MTG.N: Quote, Profile, Research) citing weaker-than-expected results for the fourth quarter and continued deterioration in variables that impact claims for mortgage insurance.

In a separate release, Radian said it retains adequate claims paying resources to cover its losses and pay all policyholders.

PMI, which lost $1 billion in the fourth quarter, had said it would look at raising additional capital by looking at various options including asset sale. (Reporting by Sweta Singh; Editing by Dinesh Nair)