Radian (RDN) Positive as Freddie Mac Gives Nod for RMAI to Write Coverage (PMI) (AGO)
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Radian Group (NYSE: RDN) shares are up over 5.5 percent on the session Monday after receiving approval from Freddie Mac for a subsidiary to start selling coverage.
According to a release late last Friday, Radian Mortgage Assurance was approved by the Federal Home Loan Mortgage Corp to write coverage through the end of 2013. As previously disclosed, RMAI maintains a similar approval for the same time period from Fannie Mae.
Radian continued, "As of September 30, 2012, Radian Guaranty maintained a risk-to-capital ratio of 20.1:1, which is below the 25:1 risk-to-capital limit imposed by certain states. In the event Radian Guaranty is no longer in compliance with the risk-based capital requirements of certain states, the company plans to write new mortgage insurance business in those states through state-specific waivers or similar relief, or by using RMAI. The amended approval from Freddie Mac does not require any capital contributions from Radian Group to Radian Guaranty or RMAI beyond those required under the original approval. Based on the original approval, as previously announced, Radian Group contributed $100 million to Radian Guaranty in February 2012, and is required to contribute $50 million of additional capital to RMAI only in the event that Radian Guaranty were to exceed the risk-based capital requirements of those states for which a waiver or other relief has not been obtained. RMAI currently has $19 million of existing capital."
Peers moving on the nes include MGIC Investment (NYSE: MTG), Assured Guaranty (NYSE: AGO), and The PMI Group (NYSE: PMI).
According to a release late last Friday, Radian Mortgage Assurance was approved by the Federal Home Loan Mortgage Corp to write coverage through the end of 2013. As previously disclosed, RMAI maintains a similar approval for the same time period from Fannie Mae.
Radian continued, "As of September 30, 2012, Radian Guaranty maintained a risk-to-capital ratio of 20.1:1, which is below the 25:1 risk-to-capital limit imposed by certain states. In the event Radian Guaranty is no longer in compliance with the risk-based capital requirements of certain states, the company plans to write new mortgage insurance business in those states through state-specific waivers or similar relief, or by using RMAI. The amended approval from Freddie Mac does not require any capital contributions from Radian Group to Radian Guaranty or RMAI beyond those required under the original approval. Based on the original approval, as previously announced, Radian Group contributed $100 million to Radian Guaranty in February 2012, and is required to contribute $50 million of additional capital to RMAI only in the event that Radian Guaranty were to exceed the risk-based capital requirements of those states for which a waiver or other relief has not been obtained. RMAI currently has $19 million of existing capital."
Peers moving on the nes include MGIC Investment (NYSE: MTG), Assured Guaranty (NYSE: AGO), and The PMI Group (NYSE: PMI).
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