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Radian Looking to Raise Over $500M in Capital

FEB 26, 2013 11:17am ET
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Radian Group Inc. announced after the market closed on Monday that is making concurrent equity and debt offerings with the proceeds to be used for working capital and additional capital support for the mortgage insurance business.

The offerings are not contingent on the completion of the other.

Radian is looking to sell up to 30 million shares of its common stock, plus the underwriters have an overallotment of additional 4.5 million shares. If the offering priced at the $8.15 per share Radian closed at on Monday, gross proceeds would total close to $282 million (including the overallotment).

On Monday, Radian at one point topped its 52-week high, reaching $8.48 per share, before falling off late in the day.

As of 11 a.m. Tuesday, after starting the day moving down as far as $0.25 per share from the previous close, Radian hit $8.44 per share before dropping back slightly to $8.35 per share. In the first 90 minutes, volume of trading in the company’s stock was 7.4 million shares, 3 million higher than the three-month daily average, according to Yahoo Finance.

The debt portion is for $200 million of convertible senior notes due 2019; at the company’s election these notes can be converted into common stock, cash or both. The underwriters have an option to purchase an additional $30 million of notes.

Morgan Stanley & Co. and Goldman Sachs & Co. are joint book-running managers of the offerings.

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