Radian (RDN) Units Enters ~$14.8B of Transactions with Assured Guaranty (AGO)

Radian Group Inc. (NYSE: RDN) today announced that on January 24, 2012, its financial guaranty insurance subsidiary, Radian Asset Assurance Inc., entered into a three-part transaction with subsidiaries of Assured Guaranty Ltd. (NYSE: AGO) that included the following:

• The commutation of a $12.9 billion portfolio reinsured by Radian Asset
  
• The ceding of $1.8 billion of public finance business
  
• An agreement to sell Municipal and Infrastructure Assurance Corporation (MIAC) for $91 million, subject to regulatory approval

The transaction is expected to positively impact Radian Asset’s, and thus the primary mortgage insurance subsidiary Radian Guaranty’s, statutory capital in the first quarter of 2012 by $100 million, including approximately $6 million in statutory capital to be generated from the sale of MIAC.

Radian Asset will receive $91 million for the sale of MIAC, which is expected to close in the first quarter of 2012. Radian purchased the company in June 2011 for $82 million.

In addition, as part of the commutation and reinsurance transactions, Radian Asset will transfer to Assured Guaranty net unearned premium of $108 million, which will have no impact on Radian’s holding company cash. Goldman, Sachs & Co. served as an advisor to Radian on the transaction.

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