News

09/26/2011

Radian and the National League of Cities Announce Agreement to Explore Formation of a New Mutual Bond Insurance Company

PHILADELPHIA, Sep 26, 2011 (BUSINESS WIRE) --

Radian Group Inc. and the National League of Cities, a non-profit association of cities and state municipal leagues (NLC), today announced an agreement between NLC and Radian's financial guaranty subsidiary, Radian Asset Assurance Inc., to explore the formation of a new public finance mutual bond insurance company.

NLC began to pursue the creation of the first-ever mutual bond insurance company in response to the need for expanded capacity in the bond insurance industry. Donald J. Borut, NLC Executive Director, praised Radian for its willingness to work with NLC in pursuing this new and compelling opportunity. Borut said that "Radian is an established and experienced bond insurer that has the resources, people, infrastructure, transparency, and vision to help NLC, its members, and the thousands of local governmental issuers that access the municipal bond market each year."

S.A. Ibrahim, Radian's Chief Executive Officer, added, "We are delighted to work with NLC, whose leadership, expertise and reputation in supporting municipal issuers are unmatched. We look forward to the opportunity to leverage Radian's knowledge of municipal bond insurance for NLC members."

The objective of creating a next generation bond insurer is to provide bondholders with a superior level of credit enhancement, while allowing municipal issuers to benefit from lower-cost financing.

"A mutual bond insurance company with a public finance book of business would restore capacity that was lost in recent years," noted David Beidler, President of Radian Asset Assurance Inc. "More importantly, the mutual insurance company structure, with the issuers as members, offers assurance to bondholders that the company will not deviate from its public finance mission."

While Radian and NLC are still working on the details of the structure, they anticipate it will involve the support of private capital from third-party investors.

About Radian

Radian Group Inc. (NYSE: RDN), headquartered in Philadelphia, provides private mortgage insurance and related risk mitigation products and services to mortgage lenders nationwide through its principal operating subsidiary, Radian Guaranty Inc. These services help promote and preserve homeownership opportunities for homebuyers, while protecting lenders from default-related losses on residential first mortgages and facilitating the sale of low-down payment mortgages in the secondary market. Additional information may be found at www.radian.com.

About the National League of Cities

The National League of Cities (NLC) is dedicated to helping city leaders build better communities. Working in partnership with the 49 state municipal leagues, NLC serves as a resource to and an advocate for the more than 19,000 cities, villages and towns it represents. More than 1,600 municipalities of all sizes pay dues directly to NLC and actively participate as leaders and voting members in the organization. Additional information may be found at www.nlc.org.

Forward-Looking Statements

Some of the statements in this press release may constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. These statements are based on our current expectations, estimates and projections. Words such as "will," "expects," "believes" and similar expressions are used to identify these forward-looking statements. These statements are only predictions and as such are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Forward-looking statements are based upon assumptions as to future events or our future financial performance that may not prove to be accurate. Actual outcomes and results may differ materially from what is expressed or forecast in these forward-looking statements. As a result, these statements speak only as of the date they were made, and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements, as well as our prospects as a whole, are subject to risks and uncertainties, including our ability to successfully develop and implement a strategy to utilize MIAC in the public finance financial guaranty market, which strategy may depend on, among other items, our ability to obtain further necessary regulatory or other approvals, to attract third-party capital and to obtain ratings sufficient to support such a strategy. For more information regarding these risks and uncertainties as well as certain additional risks that we face, you should review the "Risk Factors" detailed in Item 1A of Part II of the company's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011, and subsequent reports and registration statements filed from time to time with the Securities and Exchange Commission.

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SOURCE: Radian Group Inc.

Radian Group Inc.
Emily Riley, 215-231-1035
emily.riley@radian.com
or
National League of Cities
Gregory Minchak, 202-626-3003
minchak@nlc.org