MGIC leads drop in mortgage-insurer credit risk as loss narrows
Credit-default swaps tied to MGIC Investment Corp. led a decline among mortgage insurers after the company posted a narrower quarterly loss and said it will sell $1bn in stock and notes. Swaps tied to Milwaukee-based MGIC, the largest US mortgage insurer, fell 6.1 percentage points to 4.4% upfront, according to CMA DataVision. That means an investor buying protection on $10m of debt would pay an initial $440,000 as well as $500,000 a year. MGIC lost $150.1m, or $1.20 a share, in the first quarter, down from $184.6m, or $1.49 a share, in the year-earlier period, the company said today in a statement.