Radian Group Inc. (NYSE:RDN) announced today that its Board of
Directors has authorized a share repurchase program that enables
the company to spend up to $100 million to repurchase its common
stock. The shares may be purchased in the open market or in
privately negotiated transactions.
“The Board of Directors and management team strongly believe
that Radian’s financial strength and flexibility, business
fundamentals, growth prospects and long-term strategy are not
reflected by the company’s current stock price,” said Radian’s
Chief Executive Officer S.A. Ibrahim. “The share repurchase program
demonstrates our confidence in the strength of our businesses and
our commitment to optimizing stockholder returns.”
Ibrahim added, “The long-term outlook for our company and
businesses remains strong, as we continue to grow our mortgage
insurance in force with high-quality business, and further expand
the scope of services we offer through our fee-based businesses. We
are pleased that Radian’s strong balance sheet and financial
flexibility, including the recent use of a surplus note to satisfy
the PMIERs, has positioned us to return value more quickly to
stockholders, while at the same time continuing to support our
customers, invest in our franchise and drive long-term growth.”
The authorization provides Radian the flexibility to repurchase
shares opportunistically from time to time, based on market and
business conditions, stock price and other factors. The
authorization is effective immediately and expires on December 31,
2016. Radian may utilize a Rule 10b5-1 plan, which would permit the
company to purchase shares, at pre-determined price targets, when
it may otherwise be precluded from doing so.
Shares of Radian Group are currently trading below the company’s
September 30, 2015 book value per share of $11.77. Based on the
closing price on January 14, 2016, the $100 million share
repurchase program represents approximately 8.7 million shares of
Radian's common stock, or 4.2 percent of shares outstanding as of
September 30, 2015.
HIGHLIGHTS OF RECENT CAPITAL ACTIONS
As previously announced, Radian completed a series of actions in
2015 to strengthen its capital position, including reducing its
overall cost of capital, improving the maturity profile of its
debt, and complying with the Private Mortgage Insurer Eligibility
Requirements (PMIERs):
Creating Capital Certainty
In order to comply with PMIERs and maximize the company’s
financial flexibility, Radian took the following actions:
- In December, Radian Group transferred
$325 million of cash and marketable securities to Radian Guaranty
in exchange for a surplus note and contributed $50 million to an
exclusive affiliated reinsurer of Radian Guaranty. Radian Guaranty
is not expected to require any additional capital contributions in
order to remain compliant. Based on positive trends reflected in
its capital projections, Radian Guaranty expects to seek to redeem
a portion and possibly all of the note in 2016. This transaction
provides greater certainty regarding the timing and conditions of
capital return to Radian Group, which further supports both the
share repurchase program and other capital restructuring
possibilities.
- In April, Radian Guaranty successfully
completed the sale of Radian Asset Assurance Inc., Radian’s
financial guaranty insurance subsidiary, to Assured Guaranty Corp.,
a subsidiary of Assured Guaranty Ltd. for approximately $810
million.
Simplifying Capital Structure
In order to simplify the company’s capital structure, reduce its
overall cost of capital and improve the maturity profile of its
debt, Radian entered into a series of transactions in June
2015:
- Issued $350 million aggregate principal
amount of Senior Notes due 2020 and received net proceeds of $344
million
- Purchased $389 million principal amount
of its Convertible Senior Notes due 2017, for 28.4 million in
common shares and $127 million in cash
- Terminated a portion of the company’s
capped call for consideration to the company of 2.3 million in
common shares and $12 million in cash
- Completed an Accelerated Share
Repurchase program (ASR) under which a total of 11.0 million shares
were repurchased in the second and third quarters of 2015 using
$202 million from the proceeds of the Senior Notes due 2020.
FOURTH QUARTER CONFERENCE CALL
Radian today announced that it will hold a conference call on
Thursday, January 28, 2016, at 10:00 a.m. Eastern time to discuss
the company’s fourth quarter and year-end 2015 results, which will
be announced prior to the market open on the same day.
The conference call will be broadcast live over the Internet at
http://www.radian.biz/page?name=Webcasts or at www.radian.biz. The
call may also be accessed by dialing 800.288.8961 inside the U.S.,
or 612.332.0226 for international callers, using passcode 383877 or
by referencing Radian.
A replay of the webcast will be available on the Radian website
approximately two hours after the live broadcast ends for a period
of one year. A replay of the conference call will be available
approximately two and a half hours after the call ends for a period
of two weeks, using the following dial-in numbers and passcode:
800.475.6701 inside the U.S., or 320.365.3844 for international
callers, passcode 383877.
In addition to the information provided in the company's
earnings news release, other statistical and financial information,
which is expected to be referred to during the conference call,
will be available on Radian's website under Investors >Quarterly
Results, or by clicking on
http://www.radian.biz/page?name=QuarterlyResults.
ABOUT RADIAN
Radian Group Inc. (NYSE: RDN), headquartered in Philadelphia,
provides private mortgage insurance, risk management products and
real estate services to financial institutions. Radian offers
products and services through two business segments:
- Mortgage Insurance, through its
principal mortgage insurance subsidiary Radian Guaranty Inc. This
private mortgage insurance protects lenders from default-related
losses, facilitates the sale of low-downpayment mortgages in the
secondary market and enables homebuyers to purchase homes more
quickly with downpayments less than 20%.
- Mortgage and Real Estate
Services, through its principal services subsidiary Clayton, as
well as Green River Capital, Red Bell Real Estate and ValuAmerica.
These solutions include information and services that financial
institutions, investors and government entities use to evaluate,
acquire, securitize, service and monitor loans and asset-backed
securities.
Additional information may be found at www.radian.biz.
FORWARD-LOOKING STATEMENTS
All statements in this press release that address events,
developments or results that we expect or anticipate may occur in
the future are "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, Section 21E of the
Exchange Act and the U.S. Private Securities Litigation Reform Act
of 1995. In most cases, forward-looking statements may be
identified by words such as "anticipate," "may," "will," "could,"
"should," "would," "expect," "intend," "plan," "goal,"
"contemplate," "believe," "estimate," "predict," "project,"
"potential," "continue," "seek," "strategy," "future," "likely" or
the negative or other variations on these words and other similar
expressions. These statements, which may include, without
limitation, projections regarding our future performance and
financial condition, are made on the basis of management's current
views and assumptions with respect to future events. Any
forward-looking statement is not a guarantee of future performance
and actual results could differ materially from those contained in
the forward-looking statement. These statements speak only as of
the date they were made, and we undertake no obligation to update
or revise any forward-looking statements, whether as a result of
new information, future events or otherwise. We operate in a
changing environment. New risks emerge from time to time and it is
not possible for us to predict all risks that may affect us. The
forward-looking statements, as well as our prospects as a whole,
are subject to risks and uncertainties that could cause actual
results to differ materially from those set forth in the
forward-looking statements. These risks and uncertainties include,
without limitation:
- changes in general economic and market
conditions;
- factors that may affect the Company's
ability and willingness to repurchase shares under the proposed
repurchase program and the possibility that the program may be
suspended or terminated;
- our ability to successfully execute and
implement our business plans and strategies; and
- our ability to maintain sufficient
holding company liquidity to meet our short-term and long-term
liquidity needs, including actions and activities related to our
capital plans.
For more information regarding these risks and uncertainties as
well as certain additional risks that we face, you should refer to
the Risk Factors detailed in Item 1A of Part I of our Annual Report
on Form 10-K for the year ended December 31, 2014, and subsequent
reports and registration statements filed from time to time with
the U.S. Securities and Exchange Commission. We caution you not to
place undue reliance on these forward-looking statements, which are
current only as of the date on which we issued this presentation.
We do not intend to, and we disclaim any duty or obligation to,
update or revise any forward-looking statements to reflect new
information or future events or for any other reason.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160115005150/en/
Radian Group Inc.Emily Riley,
215-231-1035emily.riley@radian.biz
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