Industry News

Mortgage insurance giants MGIC, Radian plan merger

Fitch Ratings puts MGIC on 'Rating Watch Negative'

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A planned merger of MGIC Investment Corp. and Radian Group Inc. would put the insurance of $290 billion in mortgages and $104 billion in other investments under a single roof and create a company with $15 billion in assets. MGIC Radian Financial Group Inc., as the new company is to be called, would be overseen by MGIC Chief Executive Officer Curt S. Culver and headquartered in Milwaukee, Wis. Radian CEO S.A. Ibrahim would serve as president and chief operating officer, and succeed Culver as chief executive officer of the combined company in 2009. The merger plan announced today is subject to approval by shareholders and regulators, and could close in the fourth quarter of this year. The companies expect the merger to generate cost savings of $128 million in 2008 and 2009, while restructuring costs will total $125 million to $150 million. Fitch Ratings responded to the announcement of the merger by placing its AA+ rating of Mortgage Guaranty Insurance Corp. (MGIC) and the A+ senior deb...