The PMI Group (PMI) this week released pricing on its public offering of nearly 77.77m shares of common stock at $6.15 per share. It also agreed to sell $261m — by principal amount — of its 4.5% senior notes due 2020, according to a statement. The transactions are expected to close today with $706m of net proceeds — a $106m increase from the previously announced offering size of $400m of stock and $200m of notes. PMI also granted underwriters 30-day options to purchase up to 11.66m additional shares of common stock and up to $39m of additional notes. The company intends to use $75m of the proceeds to pay a portion of outstanding indebtedness under its credit facility, and to use $45m to boost working capital and for “general” purposes. PMI will use the remaining net proceeds to boost its principal operating subsidiary, PMI Mortgage Insurance Co. Credit Suisse Securities and BofA Merrill Lynch act as joint book-running managers for the offerings, while Dowling & Partners Securities acts as co-manager, according to a PMI statement. The infusion of net proceeds into the mortgage insurance unit would follow a $115m capital boost during Q11o, as a result of certain modified pool restructurings, PMI said in quarterly results Sunday. The company reported a $157m loss in Q110, despite a 21% decline in default notices received in the mortgage insurance segment, which guarantees lenders against default-related losses. The quarterly results include a $40.8m reduction in net revenue related to the increase in fair value of certain corporate debt obligations following improved credit spreads. Write to Diana Golobay. Disclosure: the author holds no relevant investment positions.
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