By Rebecca Melvin
New York, March 25 - MGIC Investment Corp. priced $325 million of 55-year convertible junior subordinated debentures at par to yield 9% with an initial conversion premium of 20%, a syndicate source said.
The Rule 144A deal priced at the cheap end of talk, which was for a coupon of 8.5% to 9% and an initial conversion premium of 20% to 25%.
The initial conversion price is $13.50, which is 20% higher than the $11.25 offering price. The closing stock price before the convertible pricing was $13.30.
There is an over-allotment option for up to an additional $65 million.
The notes are hard-call protected for five years and provisionally callable thereafter at a 130% hurdle. There are no puts.
Concurrent with the convertibles, MGIC priced an upsized $420 million of common stock, or 37.3 million shares, which is 20% more than the offering size previously announced. There is an option to purchase an additional 5.6 million shares at the same price.
Banc of America Securities LLC was the bookrunner for both offerings.
MGIC is a Milwaukee-based mortgage lender.
Net proceeds will be used to increase the capital of Mortgage Guaranty Insurance Corp., MGIC's principal insurance subsidiary, to expand new business volume and for general corporate purposes.
| Issuer: | MGIC Investment Corp.
|
| Issue: | Convertible junior subordinated debentures
|
| Amount: | $325 million
|
| Greenshoe: | $65 million
|
| Maturity: | 2063
|
| Bookrunner: | Banc of America Securities LLC
|
| Coupon: | 9%
|
| Price: | Par
|
| Yield: | 9%
|
| Conversion premium: | 20%
|
| Conversion price: | $13.50
|
| Conversion ratio: | 74.0741
|
| Call: | Non-callable for five years; soft callable thereafter at 130%
|
| Puts: | No puts
|
| Pricing date: | March 24
|
| Distribution: | Rule 144A
|
| Price talk: | 8.5% to 9%, up 20% to 25%
|
| Stock symbol: | NYSE: MTG
|
| Stock price: | $13.30 at close March 24
|
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