UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
Date
of report (Date of earliest event reported) January
15, 2016
Radian Group Inc.
(Exact
Name of Registrant as Specified in Its Charter)
Delaware
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1-11356
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23-2691170
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(State or Other Jurisdiction of Incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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1601
Market Street, Philadelphia, Pennsylvania
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19103
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(Address
of Principal Executive Offices)
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(Zip
Code)
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(215) 231 - 1000
(Registrant’s
Telephone Number, Including Area Code)
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any
of the following provisions (see General Instruction
A.2. below):
⃞
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
⃞
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
⃞
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
⃞
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 8.01. Other
Events.
On January 15, 2016, Radian Group Inc. (the “Company”) issued a news
release announcing that its Board of Directors approved a share
repurchase program that authorizes the Company to purchase up to $100
million of its common stock through the end of 2016.
A copy of this news release is filed as Exhibit 99.1 to this Current
Report on Form 8-K and is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
99.1 Radian
Group Inc. News Release dated January 15, 2016.
SIGNATURES
Pursuant to
the requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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RADIAN GROUP INC.
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(Registrant)
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Date:
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January 19, 2016
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By:
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/s/ Edward J. Hoffman
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Edward J. Hoffman
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Executive Vice President and General
Counsel
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EXHIBIT INDEX
Exhibit
No.
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Description
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99.1*
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Radian Group Inc. News Release dated January 15, 2016.
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Exhibit 99.1
Radian
Announces $100 Million Share Repurchase Authorization; Company to
Webcast Fourth Quarter Conference Call on January 28, 2016
PHILADELPHIA--(BUSINESS WIRE)--January 15, 2016--Radian Group Inc.
(NYSE:RDN) announced today that its Board of Directors has authorized a
share repurchase program that enables the company to spend up to $100
million to repurchase its common stock. The shares may be purchased in
the open market or in privately negotiated transactions.
“The Board of Directors and management team strongly believe that
Radian’s financial strength and flexibility, business fundamentals,
growth prospects and long-term strategy are not reflected by the
company’s current stock price,” said Radian’s Chief Executive Officer
S.A. Ibrahim. “The share repurchase program demonstrates our confidence
in the strength of our businesses and our commitment to optimizing
stockholder returns.”
Ibrahim added, “The long-term outlook for our company and businesses
remains strong, as we continue to grow our mortgage insurance in force
with high-quality business, and further expand the scope of services we
offer through our fee-based businesses. We are pleased that Radian’s
strong balance sheet and financial flexibility, including the recent use
of a surplus note to satisfy the PMIERs, has positioned us to return
value more quickly to stockholders, while at the same time continuing to
support our customers, invest in our franchise and drive long-term
growth.”
The authorization provides Radian the flexibility to repurchase shares
opportunistically from time to time, based on market and business
conditions, stock price and other factors. The authorization is
effective immediately and expires on December 31, 2016. Radian may
utilize a Rule 10b5-1 plan, which would permit the company to purchase
shares, at pre-determined price targets, when it may otherwise be
precluded from doing so.
Shares of Radian Group are currently trading below the company’s
September 30, 2015 book value per share of $11.77. Based on the closing
price on January 14, 2016, the $100 million share repurchase program
represents approximately 8.7 million shares of Radian's common stock, or
4.2 percent of shares outstanding as of September 30, 2015.
HIGHLIGHTS OF RECENT CAPITAL ACTIONS
As previously announced, Radian completed a series of actions in 2015 to
strengthen its capital position, including reducing its overall cost of
capital, improving the maturity profile of its debt, and complying with
the Private Mortgage Insurer Eligibility Requirements (PMIERs):
Creating Capital Certainty
In order to comply with PMIERs and maximize the company’s financial
flexibility, Radian took the following actions:
-
In December, Radian Group transferred $325 million of cash and
marketable securities to Radian Guaranty in exchange for a surplus
note and contributed $50 million to an exclusive affiliated reinsurer
of Radian Guaranty. Radian Guaranty is not expected to require any
additional capital contributions in order to remain compliant. Based
on positive trends reflected in its capital projections, Radian
Guaranty expects to seek to redeem a portion and possibly all of the
note in 2016. This transaction provides greater certainty regarding
the timing and conditions of capital return to Radian Group, which
further supports both the share repurchase program and other capital
restructuring possibilities.
-
In April, Radian Guaranty successfully completed the sale of Radian
Asset Assurance Inc., Radian’s financial guaranty insurance
subsidiary, to Assured Guaranty Corp., a subsidiary of Assured
Guaranty Ltd. for approximately $810 million.
Simplifying Capital Structure
In order to simplify the company’s capital structure, reduce its overall
cost of capital and improve the maturity profile of its debt, Radian
entered into a series of transactions in June 2015:
-
Issued $350 million aggregate principal amount of Senior Notes due
2020 and received net proceeds of $344 million
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Purchased $389 million principal amount of its Convertible Senior
Notes due 2017, for 28.4 million in common shares and $127 million in
cash
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Terminated a portion of the company’s capped call for consideration to
the company of 2.3 million in common shares and $12 million in cash
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Completed an Accelerated Share Repurchase program (ASR) under which a
total of 11.0 million shares were repurchased in the second and third
quarters of 2015 using $202 million from the proceeds of the Senior
Notes due 2020.
FOURTH QUARTER CONFERENCE CALL
Radian today announced that it will hold a conference call on Thursday,
January 28, 2016, at 10:00 a.m. Eastern time to discuss the company’s
fourth quarter and year-end 2015 results, which will be announced prior
to the market open on the same day.
The conference call will be broadcast live over the Internet at http://www.radian.biz/page?name=Webcasts
or at www.radian.biz. The call may also be accessed by dialing
800.288.8961 inside the U.S., or 612.332.0226 for international callers,
using passcode 383877 or by referencing Radian.
A replay of the webcast will be available on the Radian website
approximately two hours after the live broadcast ends for a period of
one year. A replay of the conference call will be available
approximately two and a half hours after the call ends for a period of
two weeks, using the following dial-in numbers and passcode:
800.475.6701 inside the U.S., or 320.365.3844 for international callers,
passcode 383877.
In addition to the information provided in the company's earnings news
release, other statistical and financial information, which is expected
to be referred to during the conference call, will be available on
Radian's website under Investors >Quarterly Results, or by clicking on http://www.radian.biz/page?name=QuarterlyResults.
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. These risks and uncertainties include, without limitation:
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changes in general economic and market conditions;
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factors that may affect the Company's ability and willingness to
repurchase shares under the proposed repurchase program and the
possibility that the program may be suspended or terminated;
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our ability to successfully execute and implement our business plans
and strategies; and
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our ability to maintain sufficient holding company liquidity to meet
our short-term and long-term liquidity needs, including actions and
activities related to our capital plans.
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, 2014, 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.
CONTACT:
Radian Group Inc.
Emily Riley, 215-231-1035
emily.riley@radian.biz
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