FEB 27, 2013 12:19pm ET

Radian Prices Equity, Debt Sales

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Radian Group Inc. priced its 34 million share common stock offering at $8 per share before the markets opened on Wednesday morning. The stock closed Tuesday at $8.43 per share and as of 11:20 a.m. Wednesday was at $8.50 per share.

Volume through midmorning was heavy, over 44 million shares traded, when the normal three-month daily average for the stock, according to Yahoo Finance, is just 4.6 million shares.

When the company announced the offering on Monday afternoon, it was for 30 million shares (minus the overallotment).

There is an overallotment option to the underwriters of 5.1 million shares.

If the overallotment is exercised, Radian is looking at proceeds of $313 million. Proceeds from both offerings will be used for working capital and general corporate purposes such as capital for the mortgage insurance business.

Concurrent with the equity sale, Radian priced a $350 million debt offering at an annual interest rate of 2.25%. Originally, Radian was looking to sell $200 million of notes. The convertible senior notes are due in 2019 and will pay interest on March 1 and Sept. 1. There is a $50 million overallotment option.

Prior to Dec. 1, 2018, the notes are convertible upon specified events; afterwards, the option can be exercised at any time. The initial exchange rate is 94.3396 shares of common stock for each $1,000 in principal amount of notes. That corresponds to $10.60 per share.

Morgan Stanley and Goldman Sachs have acted as joint book-running managers for both offerings. Dowling & Partners Securities, Keefe, Bruyette & Woods Inc., Macquarie Capital (USA) Inc. and Wells Fargo Securities have acted as co-managers for the common stock offering. KBW has acted as co-manager for the debt offering.

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