Sale accelerates Radian’s ability to comply with proposed PMIERs
Radian Guaranty Inc., the mortgage insurance subsidiary of Radian Group Inc., has entered into a stock purchase agreement to sell 100% of the issued and outstanding shares of Radian Asset Assurance Inc. to Assured Guaranty Corp., a subsidiary of Assured Guaranty Ltd., for $810 million in cash. Radian Asset is Radian’s financial guaranty insurance subsidiary and had approximately $19.4 billion in net par outstanding as of September 30, 2014. The closing, which is subject to the satisfaction of customary closing conditions including the receipt of required regulatory approvals, is excepted to occur in the first half of 2015.
The sale of Radian Asset should enable Radian Guaranty to comply with the Federal Housing Finance Agency’s proposed PMIERs (Private Mortgage Insurer Eligibility Requirements) in 2015. The financial requirements included in the proposed PMIERs exclude from “available assets” (as defined in the PMIERs) certain subsidiary capital, including Radian Guaranty’s capital that was attributable to its ownership of Radian Asset. The sale will increase Radian Guaranty’s available assets and better position Radian Guaranty to comply with the PMIERs’ financial requirements.
The Willkie deal team was led by partners Michael Groll and Rajab Abbassi, and included partners Eugene Chang, Michael Katz and Christopher Peters, and associates Ziyad Aziz, Amir Ghavi, Meghan Hungate, Rose Ohanesian and Tyler Warner.