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Moody's could lift MGIC
Moody's Investors Service said it placed the B2 financial strength rating of Mortgage Guaranty Insurance Corp. and the debt ratings of its parent company, MGIC Investment Corp., on review for upgrade.
In addition, Moody's affirmed the Ba3 financial strength rating of MGIC Indemnity Corp., a direct subsidiary of MGIC, and changed its outlook to stable from negative.
Moody's said the action was prompted by MGIC Investment's offerings of 135 million shares of its common stock and $450 million convertible senior notes (unrated) due 2020, which together will raise approximately $1.1 billion of gross proceeds.
The review for upgrade of MGIC's financial strength rating reflects the expectation that MGIC Investment will contribute a significant amount of the raised proceeds to MGIC, its flagship insurance operation, to improve the insurer's capital and liquidity position, the agency said.
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