RPT-UPDATE 3-Australia's QBE to buy PMI units for A$1 bln

(Repeats item first sent Aug 14) (Adds PMI share jump, background on restructuring)

By Mette Fraende and James Regan

SYDNEY, Aug 14 (Reuters) - QBE Insurance Ltd (QBE.AX: Quote, Profile, Research) agreed to buy the Australia, New Zealand and Asian businesses of U.S. insurer PMI Group Inc (PMI.N: Quote, Profile, Research) for about A$1 billion (US$901 million), the latest push by Australia's top insurance company to become a global property and casualty insurer.

The businesses write lenders' mortgage insurance (LMI's) and credit enhancement products for institutions.

"The purchase of PMI in Australia and Asia is in line with QBE's strategy of diversification," QBE Chief Executive Frank O'Halloran said in an statement.

The deal, subject to regulatory approvals, is to be paid 80 percent in cash, with the rest coming via a promissory note payable in three years, the company said.

The purchase would not materially lift QBE's financial leverage, which is expected to remain in the low 30 percent range, according to Moody's Investor Services.

"Therefore, the transaction is expected to bring in good returns for QBE, absent a major deterioration in the housing market or economy." Moody's analyst Sally Yim said.

Last month, Moody's cut its rating on the mortgage insurance arms of PMI due to mounting losses from mortgage securities. PMI said on Aug. 7 it would cease to sell mortgage insurance in Canada, and reconfigure its European operations to preserve capital and reduce expenses.