Radian disclosed on Friday in a filing with the SEC
that it drew down $200 million of a $400 million unsecured revolving credit facility that expires in 2011. The company said in its filing that it doesn't need the cash right now, but wanted to ensure "adequate liquidity" in the future.
From the filing:
Radian Group Inc. has a $400 million, unsecured revolving credit facility, expiring in 2011 ... On August 15, 2007, the Company drew down $200 million in principal amount under the facility, which will initially bear interest at a base rate of 8.25% per year before rolling over in four business days to the lower Eurodollar rate plus an applicable margin as specified in the Credit Agreement. The proceeds of the draw down will be used for general corporate purposes. Although the Company has no immediate needs for additional liquidity, in light of current market conditions, the Company drew on the facility to provide it with greater financial flexibility and adequate liquidity for the long-term. After the draw down, the remaining credit available under the facility is $200 million; the Company has no current plans to draw down the remainder.
Thomson reported on the draw, and also noted that the company has been targeted
as of late by class action trolling from various law firms:
This week, at least four securities lawsuits were filed against the company in U.S. District Court in Philadelphia.
Law firms representing shareholders are accusing Radian of making 'materially false and misleading' statements about the financial health of an affiliate, Credit-Based Asset Servicing and Securitization LLC. Subsequent disclosures of problems at C-BASS, which invests in subprime home loans using borrowed money and packages them into securities, tanked Radian's stock.
Radian is saying the lawsuits have no merit.
Without commenting on the merit of any individual case, I will say that the class-action specialists are clearly targeting the mortgage sector right now; any disclosure of losses seems to set off the trolling.