MGIC greenshoe exercised in full, lifts 9% convertibles due 2063 to $390 million

By Devika Patel

Knoxville, Tenn., April 9 - Underwriters for MGIC Investment Corp.'s 9% convertible junior subordinated debentures due 2063 fully exercised their over-allotment option for $25 million more of the notes, increasing the size of the issue to $390 million, according to an 8-K filed Wednesday with the Securities and Exchange Commission.

As previously reported, the underwriters partially exercised the greenshoe on March 28 for $40 million in notes.

MGIC sold the notes at par on March 24 with an initial conversion premium of 20%. The notes have a conversion price of $13.50 per share and are hard-call protected for five years and provisionally callable thereafter at a 130% hurdle. There are no puts.

Banc of America Securities LLC was the bookrunner of the Rule 144A deal.

The company plans to use the proceeds to increase the capital of Mortgage Guaranty Insurance Corp., MGIC's principal insurance subsidiary, to expand new business volume and for general corporate purposes.

MGIC is a Milwaukee-based mortgage lender.

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