MILWAUKEE, July 30 /PRNewswire-FirstCall/ — MGIC Investment Corporation (NYSE:MTG) (“MGIC”) announced today that it has concluded that the value of its investment in Credit-Based Asset Servicing and Securitization LLC (“C-BASS”) has been materially impaired. C-BASS is a limited liability company whose interests are owned by MGIC, Radian Group Inc. and the management of C-BASS. C-BASS is principally engaged in the business of investing in the credit risk of subprime single-family residential mortgages. Beginning in February 2007, the market for subprime mortgages has experienced significant turmoil, with market dislocations accelerating to unprecedented levels beginning in approximately mid-July 2007.
MGIC’s investment in C-BASS consists of approximately $466 million of equity as of June 30, 2007 and an additional $50 million drawn on July 20 and 23, 2007 under a $50 million unsecured credit facility that MGIC provided to C-BASS. As of June 30, 2007 on a pro forma basis reflecting the amounts drawn under this credit facility, MGIC’s investment in C-BASS was approximately $516 million. MGIC has not determined the range of an impairment charge, although the upper boundary of the range could be MGIC’s entire investment, less any associated tax benefit.
About MGIC Investment Corp.
Mortgage Guaranty Insurance Corporation, the principal subsidiary of MGIC Investment Corporation (http://www.mgic.com/), is the nation’s leading provider of private mortgage insurance coverage with $186.1 billion primary insurance in force covering 1.3 million mortgages as of June 30, 2007. MGIC serves 5,000 lenders with locations across the country and in Puerto Rico and Australia, helping families achieve homeownership sooner by making affordable low-down- payment mortgages a reality.
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Source: MGIC Investment Corp.