Radian talk tightens on $350 million seven-year convertibles to yield 3%-3.25%, up 30%-32.5%

By Rebecca Melvin

New York, Nov. 8 - Price talk on Radian Group Inc.'s planned $350 million of seven-year convertibles was revised during marketing Monday, tightening to a coupon of 3% to 3.25%, from 3.25% to 3.75%, and richening to an initial conversion premium of 30% to 32.5%, from a premium of 25% to 30%, according to market sources.

The registered offering has a $52.5 million greenshoe and was being sold via Morgan Stanley & Co. Inc. as the bookrunner.

The bonds will be non-callable for life with no puts. There is contingent conversion subject to a 130% price trigger, and the bonds have standard dividend and takeover protection.

In connection with the offering, the company intends to enter into a capped call transaction intended to limit potential dilution of shares.

Proceeds will be used to fund working capital and for general corporate purposes, including debt repayment of Radian's 7.75% senior notes and 5.625% senior notes before or at their respective maturity dates of June 1, 2011 and Feb. 15, 2013.

A portion of the proceeds will be used to fund the cost of its capped call transaction.

Radian Group is a Philadelphia-based mortgage insurance business.

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