MGIC Investment to price $325 million of 55-year convertibles to yield 8.5%-9%, up 20%-25%

By Rebecca Melvin

New York, March 18 - MGIC Investment Corp. plans to price $325 million of 55-year convertible junior subordinated debentures, with pricing expected next week, according to a syndicate source.

The Rule 144A offering, which matures in 2063, was talked with a coupon of 8.5% to 9% and an initial conversion premium of 20% to 25%.

There is an over-allotment option for up to an additional $65 million.

Concurrent with the convertibles, MGIC plans to price about $350 million of common stock, with an over-allotment option for up to $53 million of additional common shares.

Banc of America Securities LLC will act as bookrunner for both offerings.

Net proceeds of the convertibles offering will be used to increase the capital of Mortgage Guaranty Insurance Co., MGIC's principal insurance subsidiary, to enable it to expand new business volume and for MGIC's general corporate purposes.

MGIC is a Milwaukee-based mortgage lender.

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