S&P upgrades Radian

S&P said it raised the financial strength and long-term issuer credit ratings on Radian Guaranty Inc. to BBB from BBB- and raised the long-term issuer credit rating on Radian Group Inc. to BB from BB-.

The outlook is stable.

S&P also said it raised the ratings on senior unsecured notes issued by Radian Group to BB from BB-.

The upgrades reflect the relative strengthening of Radian's financial risk profile, aided by a decline in leverage due to execution of a capital management plan, earnings accretion and reduced reliance on double leverage improving the quality of capital over the next few years, the agency said.

The company purchased a significant amount of convertible notes due 2019 (and 2017) and paid down senior notes maturing 2017, thereby spreading out the debt maturity profile and easing up the liquidity pressure on the holding company, S&P said.

Radian is expected to further act on remaining convertibles as opportunities arise, the agency said, and to target lower leverage levels over the near- to medium-term.

Further supporting the ratings is the company's adequate competitive position, reflecting its position as one of the leading mortgage insurers in the United States, S&P said.

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