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Read about the progress we’re making across the mortgage and real estate services industry.
03/21/2016
Radian Strengthens Capital Structure
-- Purchases
-- Reduces fully diluted share count by approximately 20 million shares –
-- Achieves investment grade rating from
-
an aggregate of
$288 million principal amount of its 2.25% Convertible Senior Notes due 2019 (the 2019 Convertible Notes); and -
an aggregate of
$30 million principal amount of its 3.00% Convertible Senior Notes due 2017 (the 2017 Convertible Notes).
Radian plans to fund these purchases with
“We have taken steps to simplify and strengthen our capital structure,
which improves the maturity profile of our debt and significantly
reduces our number of diluted shares outstanding,” said Radian’s
The purchases of the convertible notes are expected to result in an
estimated pre-tax charge to GAAP earnings of approximately
-
the
$40 million market premium paid to Sellers of the convertible notes in excess of the conversion value of the purchased notes, -
the
$15 million difference between the fair value and the carrying value of the liability component of the purchased convertible notes, net of unamortized issuance costs, and -
estimated transaction costs of
$1 million .
Excluding the charge related to the purchases of the convertible notes,
pre-tax savings related to interest and amortization of debt issuance
costs on the purchased convertible notes are expected to be
approximately
The 2021 Senior Notes issuance and the purchases of the convertible
notes, together with the recently completed
-
An estimated net increase in available holding company liquidity of
approximately
$50 million . As ofDecember 31, 2015 ,Radian Group had approximately$340 million of currently available liquidity. -
An estimated net increase in long-term debt of approximately
$62 million -
An estimated net increase in stockholders’ equity of approximately
$5 million - An estimated net decrease in fully diluted shares outstanding of approximately 19.9 million. This estimate reflects the difference between the actual net increase in shares outstanding of approximately 7.3 million, and the approximately 27.2 million that would have already been included in the calculation of diluted earnings per share related to the 2019 Convertible Notes and the 2017 Convertible Notes.
RATING AGENCY UPGRADES
On
On
You may find the complete rating agency reports and information regarding the companies’ ratings on Radian’s website here.
ABOUT RADIAN
-
Mortgage Insurance , through its principal mortgage insurance subsidiaryRadian Guaranty Inc. This private mortgage insurance protects lenders from default-related losses, facilitates the sale of low-downpayment mortgages in the secondary market and enables homebuyers to purchase homes more quickly with downpayments less than 20%. -
Mortgage and Real Estate Services, through its principal services
subsidiary Clayton, as well as
Green River Capital ,Red Bell Real Estate and ValuAmerica. These solutions include information and services that financial institutions, investors and government entities use to evaluate, acquire, securitize, service and monitor loans and asset-backed securities.
Additional information may be found at www.radian.com.
FORWARD-LOOKING STATEMENTS
All statements in this press release that address events, developments or results that we expect or anticipate may occur in the future are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Exchange Act and the U.S. Private Securities Litigation Reform Act of 1995. In most cases, forward-looking statements may be identified by words such as "anticipate," "may," "will," "could," "should," "would," "expect," "intend," "plan," "goal," "contemplate," "believe," "estimate," "predict," "project," "potential," "continue," "seek," "strategy," "future," "likely" or the negative or other variations on these words and other similar expressions. These statements, which may include, without limitation, projections regarding our future performance and financial condition, are made on the basis of management's current views and assumptions with respect to future events. Any forward-looking statement is not a guarantee of future performance and actual results could differ materially from those contained in the forward-looking statement. These statements speak only as of the date they were made, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. We operate in a changing environment. New risks emerge from time to time and it is not possible for us to predict all risks that may affect us. The forward-looking statements, as well as our prospects as a whole, are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements.
For more information regarding these risks and uncertainties as well as
certain additional risks that we face, you should refer to the Risk
Factors detailed in Item 1A of Part I of our Annual Report on Form 10-K
for the year ended
View source version on businesswire.com: http://www.businesswire.com/news/home/20160321005184/en/
Source:
Radian Group Inc.
Emily Riley, 215-231-1035
emily.riley@radian.com