PMI Group Inc., the third-largest U.S. mortgage insurer, reported its 11th straight unprofitable quarter Monday and announced a plan to raise $600 million through the sale of stock and convertible debt.
The Walnut Creek, Calif., company's first-quarter loss widened to $157 million, from $115.3 million a year earlier.
"Our consolidated results for the quarter were driven by our U.S. mortgage insurance operations," Chief Executive Officer Stephen Smith said on a conference call. "We received fewer notices of default from Alt-A, high loan-to-value and troubled geographic areas than in the prior quarter."
He would not discuss security sales.
PMI is to join the No. 1 mortgage insurer, MGIC Investment Corp., in selling shares for capital as losses from delinquencies accumulate.
It plans to sell $400 million of common stock and $200 million of senior notes due in 2020 and convertible into common stock or cash to repay debt and for working capital.
About $40.8 million of PMI's first-quarter loss was due to an "increase in the fair value of certain corporate debt obligations due to improving credit spreads," the company said.
MGIC sold $700 million of shares on April 21 at a 2.8% discount from the stock's closing price a day earlier. The Milwaukee mortgage insurer issued 65.1 million shares at $10.75 each, it said in a statement.
MGIC also sold $300 million of 5% senior notes, due in 2017 and convertible into common stock.
