Radian moves to support mortgage insurance unit
The downgrade means some of the risks taken on by Radian Asset Assurance will be re-captured by customers. That means the unit will need less capital to support its remaining obligations, Radian explained.
Mortgage insurers are under pressure as slumping house prices increase claims. That’s sparked concern that some companies in the business may have to raise more capital, diluting shareholders.
Radian said on Tuesday that the dividend will support its mortgage insurance unit without such dilution.
“As we continue to consider a range of alternatives to strengthen our capital position, the dividend demonstrates our unique capability to use our financial guaranty business as a potential source of significant, non-dilutive capital,” S.A. Ibrahim, chief executive of Radian, said in a statement.
Tags: business, chief executive, companies, customers, dividend, insurance, insurance unit, insurer, risk
Leave a Reply