Radian: C-BASS Won't Affect Merger Obligation

The Radian Group Inc., Philadelphia, says it believes that the impairments it and MGIC Investment Corp., Milwaukee, will have to take on specialty servicer C-BASS will not "affect MGIC's obligation to go forward with the merger agreement."In its statement, Radian added that it did not know of any developments that would affect MGIC's obligation to close on the transaction. "We remain committed to the transaction, and look forward to completing it as promptly as possible," Radian said. Meanwhile, Friedman, Billings, Ramsey & Co. issued a report stating that, "given Radian's weaker position relative to its credit ratings, we believe that Radian needs the merger much more than MGIC. Also, the deal is not without its merits for MGIC either, namely the added breadth of product offerings at Radian and the cost savings available if the deal goes through. As a result, we believe the transaction will ultimately pan out, but at a renegotiated valuation for Radian shares." The other scenarios for the deal, according to FBR, are that the deal is broken or that it proceeds as planned. FBR described keeping the original terms as the least likely option. The two mortgage insurance firms can be found online at http://www.radian.biz and http://www.mgic.com.