Radian Group (RDN) Comments on Outlook

July 3, 2008 11:57 AM EDT

Radian Group Inc. (NYSE: RDN) commented on the recent decline in its stock price and noted several indications of the fundamental strength of its business and improvement in key performance indicators. The Company today issued the following statement:

Radian is insuring mostly prime loans which we believe will generate profitability and long-term financial strength. Our liquidity and claims paying resources remain strong and we are focused on meeting the present challenges in the housing market and overall economy by working closely with the Government Sponsored Enterprises ("GSEs") and managing our existing Risk-In-Force exposure. We believe that the recent decline of Radian's stock price is disproportionate to the fundamentals of our business.

Radian noted the following preliminary second quarter business indicators:

-- First and second lien claims paid during 2Q08 will be less than $230 million, compared to our previous guidance of $240 million. This is due in part to the strong partnerships we have established with our residential servicing clients and external counseling organizations.

-- Total first lien defaults increased during 2Q08 by 8.9%. This compares favorably with the quarterly increases reported during 1Q08 of 10% and 4Q07 of 17.3%.

-- Radian's percentage of prime business written during 2Q08 was approximately 92% up from 90% during 1Q08.

-- Radian continues to maintain strong relationships with its clients and the GSEs. We estimate current mortgage insurance market share of 16%, up from 14% at the beginning of 2008.

-- Multiple guideline tightening and pricing increases have been put in place during 2008. The latest changes go into effect on July 14, 2008 and are intended to improve risk adjusted returns.

-- This quarter will be positively impacted by significant recovery of ceded losses from captive reinsurance and SMARTHOME reinsurance, which reduces Radian's net losses and loss ratio.

-- There has been no material credit deterioration in the portfolio of our Financial Guaranty segment.

-- There is no principal required to be repaid on any of Radian's debt until 2011.
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