Radian Group Launches $349M Mortgage-Backed Securities Deal By Investing.com

WAYNE, PA – Radian Group Inc . (NYSE:), a leading provider of mortgage insurance and related services, has announced its inaugural private label prime jumbo securitization transaction. On Thursday, the company’s subsidiary, Radian Mortgage Capital LLC, disclosed plans to issue approximately $349 million in residential mortgage-backed securities (RMBS).

The offering, which is expected to close during the third quarter of 2024, will involve the sale of residential mortgages to a newly-formed subsidiary, Radian Mortgage Securities LLC, which will then deposit the mortgages with a newly-formed New York common law trust, Radian Mortgage Capital Trust 2024-J1, the issuing entity for the RMBS.

This move represents Radian’s foray into the capital markets with a direct sale of unregistered RMBS to investors. The company has stated that Radian Mortgage Capital and its affiliates may hold an interest in the RMBS, including on the closing date of the offering.

The securities involved in this transaction have not been registered under the Securities Act of 1933 and will be offered in a private sale to qualified capital markets investors. The completion of the RMBS offering is subject to market conditions and other customary considerations, and there is no guarantee that the offering will be completed as planned.

Radian Group’s announcement includes forward-looking statements regarding the expected completion and terms of the RMBS offering. These statements are based on current management expectations and are subject to risks and uncertainties that could cause actual results to differ materially.

In other recent news, Radian Group Inc. has reported a strong start to 2024. The company’s Q1 financial results showcased a 12% year-over-year increase in book value per share and a net income of $152 million. Revenues also experienced a hike, rising by 3% to $319 million. The company’s primary mortgage insurance in force reached a record of $271 billion, and new insurance written in the quarter amounted to $11.5 billion.

Radian Group’s robust credit performance was evident with a steady 2.1% default rate. The company’s capital and liquidity positions remained solid, with available holding company liquidity increasing to approximately $1.1 billion.

In terms of future expectations, Radian Group anticipates the private mortgage insurance market to reach approximately $300 billion in 2024. The company also has plans to develop a mortgage-backed securitization program and aims to ramp up share repurchases and increase dividends as capital levels improve. These are some of the recent developments surrounding Radian Group Inc.

InvestingPro Insights

As Radian Group Inc. (NYSE:RDN) leverages its mortgage expertise to enter the capital markets through a significant RMBS offering, investors may find additional context in the company’s financial health and market performance. With a robust market capitalization of $4.94 billion and a P/E ratio that stands attractively at 8.61, Radian shows solid fundamentals. The company’s commitment to shareholder returns is also evident, as it has not only maintained but also increased its dividend payments over the last 32 years, with the dividend yield currently at a healthy 3.08%. This dedication to consistent dividends, alongside a positive outlook from analysts predicting profitability for the current year, underscores the company’s financial stability and potential for sustained growth.

An InvestingPro Tip indicates that Radian’s liquid assets are in a position to cover short-term obligations, which speaks to the company’s liquidity and financial resilience. Additionally, with the company trading near its 52-week high and a price sitting at 97.24% of that peak, investor confidence seems to be reflected in the stock’s performance.

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