By Rebecca Melvin
New York, Feb. 27 -Radian Group Inc. priced an upsized $400 million of six-year convertible senior notes at par late Tuesday to yield 2.25% with an initial conversion premium of 32.5%, according to a syndicate source.
The registered, off-the-shelf deal included a $350 million base, which was initially talked at $200 million in size, and included a fully exercised $50 million greenshoe.
Pricing came at the rich end of revised talk, which was tightened during marketing to 2.25% to 2.75% with a 27.5% to 32.5% initial conversion premium. Initial talk was for a yield of 3% to 3.5% and a premium of 25% to 30%.
Concurrently with the notes, Radian also priced $312.8 million of common stock, or 39.1 million shares at $8.00 each. The stock deal, including a 34 million share base and 5.1 million share greenshoe, was upsized from an initially talked 30 million shares.
Morgan Stanley & Co. LLC and Goldman Sachs & Co. were the joint bookrunners of both offerings.
The notes are non-callable until March 8, 2016 and then are provisionally callable if shares exceed 130% of the conversion price.
The company plans to use the proceeds from both offerings to fund working capital requirements and for general corporate purposes, including additional capital support for their mortgage insurance business.
Radian is a Philadelphia-based mortgage insurer.
| Issuer: | Radian Group Inc.
|
| Issue: | Convertible senior notes
|
| Amount: | $400 million, including fully exercised greenshoe, upsized from $200 million
|
| Greenshoe: | $50 million (fully exercised), upsized from $30 million
|
| Maturity: | March 1, 2019
|
| Concurrent offering: | $312.8 million of common stock, or 39.1 million shares at $8.00 each
|
| Bookrunners: | Morgan Stanley & Co. LLC, Goldman Sachs & Co.
|
| Co-manager: | Keefe, Bruyette & Woods Inc.
|
| Coupon: | 2.25%
|
| Price: | Par
|
| Yield: | 2.25%
|
| Conversion premium: | 32.5%
|
| Conversion price: | $10.60
|
| Conversion ratio: | 94.3396
|
| Calls: | Non-callable until March 8, 2016, then provisionally callable at 130%
|
| Takeover protection: | Yes
|
| Price talk: | 2.25%-2.75%, up 27.5%-32.5%, tightened from 3.5%-4%, up 32.5%-37.5%
|
| Pricing date: | Feb. 26
|
| Settlement date: | March 4
|
| Stock symbol: | NYSE: RDN
|
| Stock price: | $8.43 at close Feb. 26
|
| Stock reference price: | $8.00
|
| Distribution: | Registered, off the shelf
|
| Market capitalization: | $1.13 billion
|
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