MGIC Investment's planned convertible deal sees revised talk at 2%-2.5% yield, up 30%-35%

By Rebecca Melvin

New York, March 6 - Talked terms were revised on MGIC Investment Corp.'s planned $350 million of seven-year convertible notes that were seen pricing late Wednesday, according to a syndicate source.

Terms were revised twice during marketing, a New York-based trader said.

The coupon was tightened to 2% to 2.5% from an initially talked yield of 3.75% to 4.25%, and the initial conversion premium was tightened to 30% to 35% from an initially talked 27.5% to 32.5% premium.

As previously reported, MGIC also planned to price 135 million shares of common stock.

The registered offerings were being sold via bookrunner Goldman Sachs & Co. The notes have an over-allotment option of up to an additional $50 million of notes, and the shares have a 20.25 million share greenshoe.

The notes are non-callable until April 10, 2017 and then are provisionally callable subject to a 130% price hurdle. There are no puts.

There is change-of-control protection and dividend protection in the form of a conversion rate adjustment for any dividends paid.

Proceeds will be used for general corporate purposes, which may include increasing the company's insurance subsidiary capital and other subsidiaries and improving liquidity by providing funds for debt service.

MGIC is a Milwaukee-based mortgage insurer.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.