MGIC CEO to Buy 25,000 Shares in Public Stock Offering
Looking to assure investors in an upcoming offering of $350 million in common stock, MGIC Investment Corp. said in a filing with the Securities and Exchange Commission Monday that CEO Curt Culver will buy 25,000 of the shares offered. The company also said it is allowing other senior executives to participate in the offering, but did not specify if anyone else had committed to participate. MGIC, whose mortgage insurance business has been hit hard by the ongoing turmoil in U.S. housing, said last week that it would raise $675 million in a joint stock and junior debt offering as part of a plan to strengthen the capital profile of the company. It originally disclosed plans to raise capital on March 4, as Housing Wire reported, saying at the time it needed the capital to "participate fully in the opportunities we see for the 2008 and subsequent books." More likely, the grab for new capital comes as an attempt to stave off a ratings downgrade. Fitch Ratings warned on February 25 that MGIC needed to bolster capital in order for its insurance sub to maintain its current ‘AA’ rating. MGIC, along with other leading mortgage insurers, recently implemented signficant changes to its underwriting guidelines that exclude writing insurance on mortgages where LTV exceeds 95 percent in key states. California, Florida, and Nevada are considered "restricted markets" by the insurer. For more information, visit http://www.mgic.com.