Exhibit 10.8

August 21 2006

The PMI Group, Inc.

3003 Oak Road

Walnut Creek, California 94597

 

Attention:    Donald P. Lofe, Jr.    Executive Vice President and Chief
Financial Officer

$300 Million Senior Credit Facility

Ladies and Gentlemen:

Bank of America, N.A. (“Bank of America”) is pleased to offer to be the sole and
exclusive administrative agent (in such capacity, the “Administrative Agent”)
for a $300 Million Senior Credit Facility (the “Senior Credit Facility”) to The
PMI Group, Inc., a Delaware corporation (“you” or the “Borrower”), and Bank of
America is pleased to offer its commitment to lend up to $80 million of the
Senior Credit Facility, upon and subject to the terms and conditions of this
letter and the Summary of Terms and Conditions attached hereto (the “Summary of
Terms”). Banc of America Securities LLC (“BAS”) is pleased to advise you of its
willingness, in connection with the foregoing commitment, to act as sole and
exclusive lead arranger and sole and exclusive book manager (in such capacities,
the “Lead Arranger”) for the Senior Credit Facility and to use its best efforts
to form a syndicate of financial institutions (the “Lenders”) reasonably
acceptable to you and the Lead Arranger for the Senior Credit Facility. The
Senior Credit Facility may be increased up to $500 million at the discretion of
the Borrower, subject to one or more financial institutions agreeing to provide
such increase, in their sole discretion.

Bank of America will act as sole and exclusive Administrative Agent for the
Senior Credit Facility and BAS will act as sole and exclusive Lead Arranger for
the Senior Credit Facility. No additional agents, co-agents or arrangers will be
appointed. In addition, no other titles will be awarded without our prior
approval and subject to your prior consent.

The commitment of Bank of America hereunder and the undertaking of BAS to
provide the services described herein are subject to the satisfaction of each of
the following conditions precedent: (a) the accuracy and completeness of all
representations that you make to Bank of America and BAS and your compliance
with the terms of this Commitment Letter (including the Summary of Terms) and
the Fee Letter (as hereinafter defined); (b) prior to the earlier of the
completion of the syndication of the Senior Credit Facility or the execution of
definitive documentation for the Senior Credit Facility, there shall be no
competing offering, placement or arrangement of any debt securities or
syndicated bank financing by or on behalf of the Borrower or any of its
subsidiaries (other than senior notes in an aggregate principal amount not to
exceed $420 million debt incurred by the Borrower or any of its subsidiaries in
the ordinary course of business and the bridge loan credit agreement with
Goldman Sachs Credit Partners L.P. and other lenders party thereto in an amount
not to exceed $345,000,000); (c) the negotiation, execution and delivery of
definitive documentation for the Senior Credit Facility consistent with the
Summary of Terms and otherwise reasonably satisfactory to Bank of America and
BAS; (d) no change, occurrence or development shall have occurred since
December 31, 2005 that could reasonably be expected to have a material adverse
effect on the business, assets, liabilities (actual or contingent), operations
or condition (financial or otherwise) of the Borrower and its subsidiaries,
taken as a whole, and (e) your having obtained commitments with respect to the
Senior Credit Facility from institutions other than Bank of America in an amount
at least equal to $220 million.

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BAS intends to commence syndication efforts promptly upon your acceptance of
this Commitment Letter and the Fee Letter, in cooperation with you. You agree to
actively assist BAS in achieving a syndication of the Senior Credit Facility
that is satisfactory to it. Such assistance shall include (a) your providing and
causing your advisors to provide Bank of America and BAS and the other Lenders
upon request with all information reasonably deemed necessary by Bank of America
and BAS to complete syndication; (b) your assistance in the preparation of an
executive summary to be used in connection with the syndication of the Senior
Credit Facility; and (c) your using commercially reasonable efforts to ensure
that the syndication efforts of BAS benefit materially from your existing
banking relationships.

It is understood and agreed that BAS will manage and control all aspects of the
syndication in consultation with you, including decisions as to the selection of
prospective Lenders, when commitments will be accepted and the final allocations
of the commitments among the Lenders. Allocation of titles will be done by BAS
subject to your prior consent. It is understood that no Lender participating in
the Senior Credit Facility will receive compensation from you in order to obtain
its commitment, except on the terms contained herein and in the Summary of
Terms.

You hereby represent and warrant that (i) all information (other than forecasts
or financial projections, if any) which has been or is hereafter made available
to Bank of America or BAS by you expressly for use in connection with the
syndication of the Senior Credit Facility and Bank of America’s commitment
hereunder (the “Information”), when taken together with the information
contained in the Borrower’s SEC filings, does not and will not, taken as a
whole, contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements contained therein not misleading,
and (ii) all forecasts and financial projections that you have made available to
Bank of America or BAS expressly for use in connection with the syndication of
the Senior Credit Facility and Bank of America’s commitment hereunder have been
prepared in good faith upon the basis of assumptions stated therein (it being
understood that such forecasts or projections are subject to significant
uncertainties and contingencies, many of which are beyond your control, and that
you make no representation as to the attainability of such forecasts or as to
whether such forecasts or projections will be achieved or materialize).

By executing this Commitment Letter, you agree to reimburse Bank of America and
BAS from time to time on demand for all reasonable out-of-pocket fees and
expenses (including, but not limited to, the reasonable fees, disbursements and
other charges of Davis Polk & Wardwell, as special counsel to the Lead Arranger
and the Administrative Agent and due diligence expenses) incurred in connection
with the preparation of this Commitment Letter and the definitive documentation
for the Senior Credit Facility and the syndication thereof.

You agree to indemnify and hold harmless Bank of America, BAS, each Lender and
each of their affiliates and their respective officers, directors, employees,
agents, advisors and other representatives (each, an “Indemnified Party”) from
and against (and will reimburse each Indemnified Party as the same are incurred
for) any and all claims, damages, losses, liabilities and expenses (including,
without limitation, the reasonable fees, disbursements and other charges of
counsel) that may be incurred by or asserted or awarded against any Indemnified
Party, in each case arising out of or in connection with or by reason of
(including, without limitation, in connection with any investigation, litigation
or proceeding or preparation of a defense in connection therewith) any matters
contemplated by this Commitment Letter, except to the extent such claim, damage,
loss, liability or expense is found by a court of competent jurisdiction to have
resulted from such Indemnified Party’s gross negligence or willful misconduct.
In the case of an investigation, litigation or proceeding to which the indemnity
in this paragraph applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by you, your equity holders
or creditors or an Indemnified Party, whether or not an Indemnified Party is
otherwise a party thereto and whether or not the transactions contemplated
hereby are consummated. You also agree that no Indemnified Party shall have any
liability (whether direct or indirect, in contract or tort or

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otherwise) to you or your subsidiaries arising out of, related to or in
connection with any aspect of the transactions contemplated hereby, except to
the extent of direct, as opposed to special, indirect, consequential or
punitive, damages determined in a final non-appealable judgment by a court of
competent jurisdiction to have resulted from such Indemnified Party’s gross
negligence or willful misconduct. It is further agreed that Bank of America
shall be liable solely in respect of its own commitment to the Senior Credit
Facility on a several, and not joint, basis with any other Lender, and that such
liability shall only arise to the extent damages have been caused by a breach of
Bank of America’s obligations hereunder to negotiate in good faith definitive
documentation for the Senior Credit Facility on the terms set forth herein as
determined by a court of competent jurisdiction. You hereby agree that no
Indemnified Party shall be liable for damages arising from the use by others of
information or other materials made available by any Indemnified Party on
IntraLinks or another similar electronic system that are accurately reproduced
and posted thereon.

This Commitment Letter and the fee letter among you, Bank of America and BAS of
even date herewith (the “Fee Letter”) and the contents hereof and thereof are
confidential and, except for disclosure hereof or thereof on a confidential
basis to your accountants, attorneys and other advisors or as otherwise required
by law, may not be disclosed in whole or in part to any person or entity without
our prior written consent; provided, however, it is understood and agreed that
you may disclose this Commitment Letter (including the Summary of Terms) but not
the Fee Letter after your acceptance of this Commitment Letter and the Fee
Letter, to, or in filings with, the Securities and Exchange Commission and other
applicable regulatory authorities and stock exchanges. Bank of America and BAS
shall be permitted to use information related to the syndication and arrangement
of the Senior Credit Facility in connection with marketing, press releases or
other transactional announcements or updates provided to investor or trade
publications; provided that the content of each such release, announcement or
update shall be reasonably acceptable to the Borrower. Bank of America and BAS
hereby notify you that pursuant to the requirements of the USA PATRIOT Act,
Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the “Act”), each
of them is required to obtain, verify and record information that identifies
you, which information includes your name and address and other information that
will allow Bank of America or BAS, as applicable, to identify you in accordance
with the Act.

You acknowledge that Bank of America and BAS or their affiliates may be
providing financing or other services to parties whose interests may conflict
with yours. Bank of America and BAS agree that they will not furnish
confidential information obtained from you to any of their other customers or
prospective customers and that they will treat confidential information relating
to you and your affiliates with the same degree of care as they treat their own
confidential information. Bank of America and BAS further advise you that they
will not make available to you confidential information that they have obtained
or may obtain from any other customer. In connection with the services and
transactions contemplated hereby, you agree that Bank of America and BAS are
permitted to access, use and share with any of their advisors (legal or
otherwise) or representatives any information concerning you or any of your
affiliates that is or may come into the possession of Bank of America, BAS or
any of such affiliates (on a confidential basis unless such information is
publicly available).

In connection with all aspects of each transaction contemplated by this letter,
you acknowledge and agree, and acknowledge your affiliates’ understanding, that:
(i) the Senior Credit Facility and any related arranging or other services
described in this letter are arm’s-length commercial transactions between you
and your affiliates, on the one hand, and Bank of America and BAS, on the other
hand, and you are capable of evaluating and understanding and understand and
accept the terms, risks and conditions of the transactions contemplated by this
letter; (ii) in connection with the process leading to such transaction, Bank of
America and BAS each is and has been acting solely as a principal and is not the
financial advisor, agent or fiduciary, for you or any of your affiliates,
stockholders, creditors or employees or any other party; (iii) neither Bank of
America nor BAS has assumed or will assume an advisory, agency or

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fiduciary responsibility in your or your affiliates’ favor with respect to any
of the transactions contemplated hereby or the process leading thereto
(irrespective of whether Bank of America or BAS has advised or is currently
advising you or your affiliates on other matters) and neither Bank of America
nor BAS has any obligation to you or your affiliates with respect to the
transactions contemplated hereby except those obligations expressly set forth in
this letter and any definitive documentation; (iv) Bank of America and BAS and
their respective affiliates may be engaged in a broad range of transactions that
involve interests that differ from yours and your affiliates and Bank of America
and BAS have no obligation to disclose any of such interests by virtue of any
advisory, agency or fiduciary relationship; and (v) Bank of America and BAS have
not provided any legal, accounting, regulatory or tax advice with respect to any
of the transactions contemplated hereby and you have consulted your own legal,
accounting, regulatory and tax advisors to the extent you have deemed
appropriate.

The provisions of the immediately preceding five paragraphs shall remain in full
force and effect regardless of whether any definitive documentation for the
Senior Credit Facility shall be executed and delivered, and notwithstanding the
termination of this letter or any commitment or undertaking hereunder; provided
that upon execution and delivery of such definitive documentation, such
definitive documentation shall supersede this letter other than with respect to
the rights of BAS.

This Commitment Letter and the Fee Letter may be executed in counterparts which,
taken together, shall constitute an original. Delivery of an executed
counterpart of this Commitment Letter or the Fee Letter by telecopier or
facsimile shall be effective as delivery of a manually executed counterpart
thereof.

This Commitment Letter and the Fee Letter shall be governed by, and construed in
accordance with, the laws of the State of New York. Each of you, Bank of America
and BAS hereby irrevocably waives any and all right to trial by jury in any
action, proceeding or counterclaim (whether based on contract, tort or
otherwise) arising out of or relating to this Commitment Letter (including,
without limitation, the Summary of Terms), the Fee Letter, the transactions
contemplated hereby and thereby or the actions of Bank of America and BAS in the
negotiation, performance or enforcement hereof. The commitments and undertakings
of Bank of America and BAS may be terminated by us, if you fail to perform your
obligations under this Commitment Letter or the Fee Letter on a timely basis.

This Commitment Letter, together with the Summary of Terms and the Fee Letter,
embodies the entire agreement and understanding among Bank of America, BAS, you
and your affiliates with respect to the Senior Credit Facility and supersedes
all prior agreements and understandings relating to the specific matters hereof.
However, please note that the terms and conditions of the commitment of Bank of
America and the undertaking of BAS hereunder are not limited to those set forth
herein or in the Summary of Terms. Those matters that are not covered or made
clear herein or in the Summary of Terms or the Fee Letter are subject to mutual
agreement of the parties. This Commitment Letter is not assignable by the
Borrower without our prior written consent and is intended to be solely for the
benefit of the parties hereto and the Indemnified Parties.

This offer will expire at 5:00 p.m. New York City time on August 21, 2006 unless
you execute this letter and the Fee Letter and return them to us prior to that
time (which may be by facsimile transmission), whereupon this letter and the Fee
Letter (each of which may be signed in one or more counterparts) shall become
binding agreements. Thereafter, this undertaking and commitment will expire on
October 15, 2006 unless definitive documentation for the Senior Credit Facility
is executed and delivered prior to such date.

[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

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We are pleased to have the opportunity to work with you in connection with this
important financing.

 

Very truly yours, BANK OF AMERICA, N.A. By:   /s/ Michael W. Colon   Name:  
Michael W. Colon   Title:   Senior Vice President

 

BANC OF AMERICA SECURITIES LLC By:   /s/ Jonathan Mullen   Name:   Jonathan
Mullen   Title:   Principal

 

ACCEPTED AND AGREED TO
AS OF THE DATE FIRST ABOVE WRITTEN: THE PMI GROUP, INC. By:   /s/ Donald P.
Lofe, Jr.   Name:   Donald P. Lofe, Jr.   Title:   Executive Vice President and
Chief Financial Officer