Radian Prices Senior Notes Offering

Rhea-AI Summary

Radian Group Inc. (RDN) announced a public offering of $625 million senior unsecured notes due 2029, with a 6.200% annual interest rate. The proceeds will be used to redeem existing notes and for general corporate purposes. The Offering is expected to close on March 4, 2024.

Insights

Financial Analyst

The pricing of Radian Group Inc.'s public offering of senior unsecured notes is a significant event for the company, signaling its capital raising strategy and impacting its financial structure. The decision to issue notes at a 6.200% interest rate, which is higher than the 4.500% notes due October 2024, indicates a potential increase in borrowing costs. This could be reflective of the current interest rate environment or a perceived increase in risk associated with the company's debt. Investors will be interested in how this new debt issuance will affect the company's leverage ratios and interest coverage metrics, which are critical factors in assessing the financial health and creditworthiness of the firm.

Furthermore, the use of proceeds to redeem the 6.625% senior notes due March 2025 suggests a proactive approach to debt management. This refinancing could lead to interest expense savings, albeit slight, given the marginally lower interest rate of the new notes. The stated intention to use excess proceeds for general corporate purposes, including potential debt repayment, provides flexibility but also warrants close monitoring to ensure that the capital is allocated efficiently to support growth and shareholder value.

Market Research Analyst

From a market perspective, the offering of senior unsecured notes by Radian Group Inc. could be interpreted as a strategic move to optimize its capital structure amid fluctuating market conditions. The timing of the offering, the chosen interest rate and the maturity date are all strategic decisions that reflect the company's market outlook and financial planning. Market participants will likely analyze the demand for these notes as an indicator of investor confidence in Radian's long-term prospects and the overall appetite for corporate debt in the current economic climate.

It's also important to consider the role of the joint book-running managers and co-managers in the success of this offering. Their reputation and ability to market the notes effectively can influence the offering's outcome. The involvement of multiple financial institutions suggests a broad effort to reach diverse investor bases, potentially improving the offering's liquidity and pricing.

Debt Capital Markets Expert

In the context of debt capital markets, Radian Group Inc.'s approach to refinancing existing debt before maturity reflects a strategic maneuver to manage its interest rate risk and debt profile. The choice to redeem higher-interest notes and replace them with slightly lower-interest ones, despite the additional costs associated with issuing new debt, indicates a careful balancing act between current cash flow considerations and long-term debt servicing costs.

Investor reception to the new notes, as evidenced by the order book and eventual pricing relative to the initial price talk, will provide insights into market perceptions of credit risk and the relative attractiveness of Radian's credit story compared to peers. The senior unsecured nature of the notes also implies that they rank below secured debt in the event of liquidation, which may affect the yield demanded by investors.

WAYNE, Pa.--(BUSINESS WIRE)-- Radian Group Inc. (NYSE: RDN) announced today that it has priced its public offering (the “Offering”) of $625 million aggregate principal amount of senior unsecured notes due 2029 (the “Notes”). The Offering is expected to close on March 4, 2024, subject to customary closing conditions.

The Notes will pay interest semi-annually on May 15 and November 15, beginning on November 15, 2024, at a rate of 6.200% per year, and will mature on May 15, 2029.

The Company intends to use the net proceeds from the Offering to redeem the Company’s 6.625% senior notes due March 2025. The Company expects to use the balance of the net proceeds, together with cash on hand, for general corporate purposes, which may include funding a portion of the redemption, repurchase or repayment of all or a portion of the Company’s 4.500% senior notes due October 2024. This press release does not constitute a notice of redemption with respect to, or an offer to purchase, any securities.

RBC Capital Markets, LLC, Goldman Sachs & Co. LLC and U.S. Bancorp Investments, Inc. are acting as joint book-running managers and Academy Securities, Inc., Barclays Capital Inc., CIBC World Markets Corp., Citizens JMP Securities, LLC, Keefe, Bruyette & Woods, Inc., Samuel A. Ramirez & Company, Inc. and UBS Securities LLC are acting as co-managers for the Offering. The Notes are being offered for sale pursuant to a prospectus and related prospectus supplement that constitute a part of the Company’s shelf registration statement filed with the Securities and Exchange Commission (the “SEC”) on Form S-3 on February 24, 2023. Before making an investment, potential investors should first read the prospectus supplement and accompanying prospectus, the registration statement and the other documents that the Company filed or will file with the SEC in connection with the Offering. A copy of the prospectus supplement and the accompanying base prospectus for the Offering has been filed with the SEC and is available for free on the SEC's website: www.sec.gov. Alternatively, copies may be obtained from RBC Capital Markets, LLC toll-free at 1-866-375-6829, or from Goldman Sachs & Co. LLC, Prospectus Department, 200 West Street, New York, NY 10282, telephone: 1-866-471-2526.

This press release is for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to buy any security of the Company, nor will there be any sale of any such security in any jurisdiction in which such offer, sale or solicitation would be unlawful. The Offering may be made only by means of a prospectus supplement and accompanying base prospectus filed with the SEC.

About Radian
Radian Group Inc. (NYSE: RDN) is ensuring the American dream of homeownership responsibly and sustainably through products and services that include industry-leading mortgage insurance and a comprehensive suite of mortgage, risk, title, valuation, asset management and other real estate services. We are powered by technology, informed by data and driven to deliver new and better ways to transact and manage risk.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240228649480/en/

For Investors

John Damian – Phone: 215.231.1383

Email: john.damian@radian.com

For the Media

Rashi Iyer – Phone: 215.231.1167

Email: rashi.iyer@radian.com

Source: Radian Group Inc.

FAQ

What is the ticker symbol for Radian Group Inc.?

The ticker symbol for Radian Group Inc. is RDN.

What is the total amount of senior unsecured notes offered in the public offering?

Radian Group Inc. offered $625 million aggregate principal amount of senior unsecured notes due 2029.

When is the expected closing date for the Offering?

The Offering is expected to close on March 4, 2024, subject to customary closing conditions.

What is the annual interest rate for the senior unsecured notes?

The senior unsecured notes carry an annual interest rate of 6.200%.

How will the net proceeds from the Offering be utilized?

The net proceeds will be used to redeem the Company's 6.625% senior notes due March 2025 and for general corporate purposes.