Radian to purchase $389 million of convertibles due 2017 on June 23

By Tali Rackner

Norfolk, Va., June 18 – Radian Group Inc. plans to purchase $389 million of its convertible senior notes due 2017, according to a news release.

Following the June 23 purchase, $61 million of the convertibles will remain outstanding.

The transaction will be funded with $127 million in cash and the issuance of about 28.4 million shares of common stock.

In connection with the purchase Radian is terminating a corresponding portion of the capped call that it entered into in 2010 in connection with the initial issuance of the 2017 convertible notes, for expected proceeds of roughly $12 million in cash and 2.3 million in shares of Radian common stock.

In addition, the company said it also intends to enter into an accelerated share repurchase program to repurchase a total of about $202 million of Radian’s common stock order to reduce the dilutive impact of the convertible purchase.

Radian is a Philadelphia-based mortgage insurance company.

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