Radian Announces Updated Pricing for MI Business and Completion of Share Repurchase Program
29 Février 2016 - 12:30PM
Business Wire
-- Updated MI pricing provides increased
risk-based granularity –
-- Company successfully completes $100 million
share repurchase program –
Radian Group Inc. (NYSE:RDN) announced today that its principal
mortgage insurance subsidiary, Radian Guaranty Inc., will be
updating its premium rates for its mortgage insurance business. The
updated rates will provide increased risk-based granularity to the
company’s pricing and better align its pricing with the capital
requirements under the GSE Private Mortgage Insurer Eligibility
Requirements and with industry trends.
Radian’s new borrower-paid monthly rate card, which is available
on the company’s website and will become effective in April,
subject to regulatory approval, has the following
characteristics:
- Refined credit tiers with the expansion
of FICO buckets from four to eight
- Generally lower rates for the
following:
- 740+ FICOs for loan terms greater than 20
years
- 680+ FICOs for loan terms of 20 years and
fewer
- Generally higher rates for loans with
FICOs below 740 for loan terms greater than 20 years
- Eliminated adjustments for loan amounts
greater than $417,000 and adjustments for rate/term refinances
“Our top priority at Radian is to write as much new,
high-quality mortgage insurance business as possible at an
attractive return, and in a manner that is consistent with
regulatory requirements,” said Radian Guaranty President Teresa
Bryce Bazemore. “We believe that these pricing changes will help us
to support our customers and answer the market’s demand for our
products, while also positioning us to write even more
business.”
OVERVIEW OF RECENT PRICING ACTIONS
As part of its strategy to compete for the high-quality business
being originated today, capture a larger share of borrower-paid
monthly business and generate a blended return on equity in the
mid-teens, Radian has:
- increased its filed rates for
lender-paid mortgage insurance, which will become effective on
March 28, 2016, subject to regulatory approval;
- continued to provide customized rates
for lender-paid singles on a selective and negotiated basis, while
declining to participate in the significantly discounted aggregated
singles business; and
- as discussed above, updated its
borrower-paid monthly rates in order to remain competitive and
capture more high-quality borrower-paid monthly business. These
rates will become effective on April 7, 2016, subject to regulatory
approval.
Applying these combined actions to Radian’s new business
production in 2015 would have resulted in a modest increase in its
average premium rate.
SHARE REPURCHASE PROGRAM
As of December 31, 2015, Radian Group had approximately $340
million of currently available liquidity. In February, Radian fully
completed its previously announced $100 million share repurchase
program, purchasing approximately 9.4 million shares of Radian
common stock at an average price of $10.62 per share, including
commissions. This represents approximately 3.8 percent of the
company’s diluted shares outstanding as of December 31, 2015.
“We are pleased that Radian’s improved financial position has
positioned us to return value more quickly to stockholders,” stated
Radian Chief Executive Office S.A. Ibrahim. “The successful
completion of our share repurchase program demonstrates our
confidence in the strength of our businesses and our commitment to
optimizing stockholder returns.”
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.
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, 2015, 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.
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version on businesswire.com: http://www.businesswire.com/news/home/20160229005589/en/
Radian Group Inc.Emily Riley,
215-231-1035emily.riley@radian.biz
Radian (NYSE:RDN)
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