MGIC Plans $46 Million Stock Issue Mostly to Shore Up Mortgage Unit
MGIC Investment Corp., parent of a major mortgage-insurance company, said it plans to raise about $46 million in an initial public offering of stock.
About $35 million of the proceeds is to be used to increase the capital of the insurance unit, Milwaukee-based Mortgage Guaranty Insurance Corp. The rest will be used for general corporate purposes, including payment of dividends, the company said.
Mortgage Guaranty Insurance is a leader in the business of insuring home loans for banks, thrifts, and mortgage companies.
After reviewing the proposed offering, Standard & Poor's Corp. and Moody's Investors Service left their ratings of the unit's claims-paying abilities unchanged, the prospectus indicated. The ratings are AA from S&P and Aa3 from Moody's.
In all, eight million shares are to be offered, with 2.5 million shares being sold by MGIC and 5.5 million by its main shareholder, Northwestern Mutual Life Insurance Co.
The offering is expected to occur this summer at a price of $19 to $22 a share. MGIC will receive no proceeds from the sale of shares by Northwestern Mutual.