Radian Group to Purchase $389M of Convertible Notes

Radian Group in Philadelphia has agreed to purchase $389 million of its convertible senior notes.

The provider of private mortgage insurance will acquire the 3% convertible senior notes due 2017 with a combination of $127 million cash and 28.4 million shares of its common stock. After the purchase closes, Radian said $61 million principal amount of the convertible senior notes will remain outstanding.

Radian will book a pretax, second-quarter $92 million charge to cover the cost of purchase of the convertible senior notes.

The agreement comes the same week that Radian began a sale of $300 million of senior unsecured notes due 2020. Radian had previously said that it would use the sale of senior unsecured notes, combined with common stock, to purchase its outstanding 2017 convertible notes.

Additionally, Radian said Thursday that it will begin a share-buyback program, with the goal of repurchasing $202 million of its common stock.

"We are pleased to address our corporate capital structure in a way that will reduce our overall cost of capital, while improving the maturity profile of our debt," S.A. Ibrahim, chief executive, said in a news release.