Radian Agrees to Commute $827 Million Financial Guaranty Reinsurance Portfolio to FGIC
12 Novembre 2012 - 2:00PM
Business Wire
Radian Group Inc. today announced that on November 09, 2012, its
financial guaranty insurance subsidiary, Radian Asset Assurance
Inc., entered into an agreement (the “Agreement”) with Financial
Guaranty Insurance Company (“FGIC”) which, if consummated, would
commute the remaining $827 million of outstanding par reinsured by
Radian Asset from FGIC (the “Commutation”). This portfolio
represents 13 percent of Radian Asset’s total reinsurance exposure
as of September 30, 2012, and includes $196 million of Radian
Asset’s $225 million in net par outstanding as of September 30,
2012, related to Jefferson County, Alabama sewer warrants.
“Entering into this agreement is another example of our efforts
to actively reduce our financial guaranty exposure, which is an
important component of our capital management strategy,” stated
Chief Executive Officer S.A. Ibrahim.
A rehabilitation proceeding for FGIC pursuant to Article 74 of
the New York Insurance Law is currently pending before the Supreme
Court of the State of New York (the “Court”), and the effectuation
of the Commutation is subject to approval by the Court of the
Agreement and certain related matters. Such approval is within the
Court’s sole discretion, and no assurance can be given that the
Court will grant such approval or when it will be granted. If the
Court grants such approval, Radian Asset will be required to make a
commutation payment to FGIC in the approximate amount of $52.4
million once that approval becomes final in accordance with the
Agreement, and the Commutation will become effective upon FGIC’s
receipt of such payment. The amount of this payment was determined
primarily based on existing loss reserves and unearned premium
reserves, and therefore is not expected to have a material impact
on Radian’s consolidated financial statements or Radian Asset’s
statutory capital position.
About Radian
Radian Group Inc. (NYSE: RDN), headquartered in Philadelphia,
provides private mortgage insurance and related risk mitigation
products and services to mortgage lenders nationwide through its
principal operating subsidiary, Radian Guaranty Inc. These services
help promote and preserve homeownership opportunities for
homebuyers, while protecting lenders from default-related losses on
residential first mortgages and facilitating the sale of
low-downpayment mortgages in the secondary market.
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
Securities Exchange Act of 1934 and the United States (“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,” 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 information. The forward-looking statements, as
well as our prospects as a whole, are subject to risks and
uncertainties, including our ability to consummate the Commutation
which depends on, among other things, obtaining the Court’s
approval of the Agreement.
For more information regarding 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,
2011 and in Item 1A of Part II of our Quarterly Reports on Form
10-Q filed during 2012, and in subsequent reports and registration
statements filed from time to time with the Securities and Exchange
Commission.
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