Private mortgage insurer MGIC (MTG) raised $1.15 billion in net proceeds after selling 135 shares of common stock and $500 million in senior notes due in 2020.
The company also completed its previously announced transfer of $800 million to principal mortgage insurance subsidiary, Mortgage Guaranty Insurance Corp.
The transfer of funds to the mortgage guaranty business buffered the MI insurer’s capital levels, improving its risk-to-capital ratio to approximately 20-to-1. With the transfer of funds, MGIC now meets all of the capital requirements stated by jurisdictions that force MI insurers to meet certain standards before writing insurance in particular states.
"The success of our recent capital raise puts MGIC in an excellent position to take advantage of the improving housing market," said Curt S. Culver, CEO and chairman of the Board of MGIC and MTG. "Our well established national sales organization makes us a formidable presence for our competition. The additional capital also improves our holding company liquidity and further strengthens MGIC's claims paying ability."