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MGIC Investment Corp. (NYSE: MTG) recovered handily this week, but profit taking and a dilutive $1.1 billion capital raise have put the brakes on in this troubled turnaround. So it is rather interesting to see a credit rating upgrade for this deeply troubled mortgage insurer.

Standard & Poor’s upgraded its corporate credit ratings to B- from CCC+ on Friday. The move might not sound like much, and it might not be anywhere close to investment grade as of yet, but this is a situation that is getting more financially fit for new investors who have been interested in this turnaround mortgage insurer. Today’s upgrades include Mortgage Guaranty Insurance Corp., MGIC Investment Corp., and MGIC Indemnity Co.

S&P also gave it a Stable outlook, based on the new capital raise mitigating the rating agency’s prior concerns about financial statements and liquidity. S&P now believes that the new capital (which would be more than$1.2 billion if overallotments are used) support MGIC’s capital position and will allow management to reach a risk-to-capital ratio of under 25 at the company.

S&P also thinks that this mitigates or eliminates the inherent risks of a regulatory takeover coming into play. S&P even said that the company would have been close to break-even had it not been for reserve charges and charges tied to Freddie Mac and Countrywide settlements.

Today’s news is not likely to move the needle on a day trading basis. The stock rose from $2.60 on February 25, and then it rose all the way up to as high as $61.9 and to a closing high of $5.61 after a seven-consecutive trading day rally. The stock gave back much of those gains to $4.92 on the recapitalization from the $1.1 billion capital raise.