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10,000 $11 MTG STRIKE OPTIONS MARCH 2018 BOUGHT TODAY
10,000 OPTIONS represent 1,000,000 shares. Volume is now increasing in MTG.
NASDAQ MARKET STREAM
"Block Option Report:
10,000 $MTG 3/15/2019 11 Calls traded at 0.49 when the bid/ask spread was .02/1.04 (open interest 30). This was an opening trade, but we can’t tell if it was bought or sold."
$19.4 TRILLION DOLLARS ON SIDELINES NOW!
ACCORDING TO "MORNING STAR" AND "MARKETWATCH "
DOLLAR INDEX DROPS TO 96.17, A ONE MONTH LOW. When DOLLAR DROPS STOCK market moves higher, historically.
"That comes to $19.4 trillion in gross "cash" and equivalents that is "on the sidelines" of the stock market. Meanwhile, says, the Fed, the total market value of all U.S. stocks at the same time came to $41.7 trillion (Table L.223, line 1. p. 130).
So by the logic of this argument, there is roughly 50 cents in "cash on the sidelines" and "waiting to be put to work" for every $1 already held in stocks. Further Fed data suggests that U.S. households in aggregate hold assets in comparable proportions."
Here's the whole article from Morning Star:
https://www.morningstar.com/news/market-watch/TDJNMW_2018123190/update-this-is-how-much-money-is-sitting-on-the-sidelines-waiting-to-come-in-to-the-market.html
Here's an dxy chart, that shows after dxy hit 97.6, it has started declining:
https://www.marketwatch.com/investing/index/dxy
MORTGAGE RATES END 2018 AT 4 MONTH LOW
MORTGAGE NEWS DAILY
BY: MATTHEW GRAHAM
Mortgage Rates End 2018 at 4-Month Lows
Dec 28 2018, 4:27PM
Mortgage rates moved lower by an almost imperceptible amount today. The improvement was enough to bring the average lender to the lowest levels since the end of August, 2018. In other words, these are the best rates in 4 months.
2 months ago, all hope seemed lost. Rates were the highest in years and there were few reasons to expect the pain to subside, short of a massive meltdown in stocks or a big picture shift in the economy. As you're likely aware, stocks indeed tanked heading into the 4th quarter. And as I've mentioned many times since, that stock weakness was largely responsible for rates' ability to reclaim lost ground.
CREDIT SUISSE HAS MGIC $9.85 BOOK VALUE AT FYE
According to CREDIT SUISSE analyst report October 17th MGIC has a target price of $13 and a book value $9.85.
$208.5 BIL. INSURANCE BOOK MGIC, PREPAYS LOWEST 10 YRS
The recipe is baking steady revenues in coming quarters. At SEPT 2018 MGIC INVESTMENT had 80.1 persistency rate. PERSISTENCY rate is simply what percentage MGIC retains on the book in a years time.
[Bear in mind that MGIC has been reporting MONTHLY INCREASES in INSURANCE IN FORCE]
MORTGAGE NEWS DAILY reported this morning:
"BY: JANN SWANSON
Prepayment Activity at Recession Lows, Total Delinquencies Down YoY
Dec 19 2018, 4:05PM
Mortgage prepayment activity reached a 10-year low in November. Black Knight said, in its "first look" at the months mortgage data, that the character of prepays has been changing from a good indicator of refinance activity to one driven more by home sales.
With refinancing activity fading and home sales entering its usual slow season, prepays fell by 14.95 percent from the previous month and are down 33 percent compared to November 2017."
DXY DROPS TO 96.49, ONE MONTH LOW/MORTGAGE RATES FALL ALSO
Investors convert foreign currency to US DOLLARS to invest in US TREASURY INSTRUMENTS, which drives the price higher. There are many other reasons to buy DOLLARS.
https://www.marketwatch.com/investing/index/dxy
Generally, DROPS in the USD is associated with higher STOCK prices.
"Why does the dollar go up when the stock market goes down?
A country's currency can become more valuable in relation to the rest of the world in two ways: when the amount of currency units available in the world market place is reduced (i.e., when the Fed increases interest rates and causes a reduction in spending), or by an increase in the demand for that particular currency.Apr 3, 2018"
MORTGAGE RATES LOWEST SINCE AUGUST 2018 AHEAD OF FED DECISION
BY: MATTHEW GRAHAM
MORTGAGE NEWS DAILY
Dec 18 2018, 4:01PM
"Mortgage rates fell today as lenders got caught up with the friendly move in the bond market that we noted yesterday. Incidentally, today's bond market movement was also friendly (i.e. it suggested rates should continue to move lower).
There's almost never only one reason that financial markets are doing whatever they're doing, even if there is frequently one reason that's bigger than the others. Both stocks and oil prices were high on the list of reasons for today's interest rate movement.
When it comes to stocks, big losses frequently help rates (investors often seek safe-havens when stocks are panicking, and bond markets can be one of those havens. More bond buying = lower rates).
" Loan Originator Perspective
Both bonds and stocks rallied today, prior to Wednesday's Fed Statement and Chairman Powell's press conference. Daily rate sheets will come out tomorrow before Fed news, so I'm leaning toward floating new applications until tomorrow, since I can lock them (if prudent) when Fed news hits. -Ted Rood, Senior Originator
Bonds continue to hold onto recent gains but the 10yr is still unable to break to new lows. The FOMC announcement could be what pushes us to new lows, but i think i would lock here. We have rallied nicely and you should be seeing better offers today. -Victor Burek, Churchill Mortgage
Today's Most Prevalent Rates
30YR FIXED - 4.75%
FHA/VA - 4.25%
15 YEAR FIXED - 4.25%
5 YEAR ARMS - 4.375%-4.875% depending on the lender
US DOLLAR INDEX(DXY) HITS LOWER LEVEL IN A WEEK 96.6, MORTGAGE RATES LOW
DXY DATA
https://www.marketwatch.com/investing/index/dxy
As more investors put money in money funds, MORTGAGE RATES decline. However, investors aren't buying US Treasury instruments, signaling that the drop in the stock market maybe temporary.
In any event, PMI COMPANIES will benefit from banks paying lower rates on deposits and offering declining MORTGAGE RATES.
MGIC AND RADIAN PERSISTENCY RATES, Approximately 81% ON THEIR INSURANCE IN FORCE($208 billion)will lead to a good level of premium income revenues in coming quarters.
3759 MARCH 2018 $11 PUT OPTIONS BUYS OVER LAST 3 WEEKS FORCE PRICE DOWN
Over the last three weeks, MTG BEARS purchased 3759 $11 strike PUT OPTIONS for MARCH 2018, that have WEIGHED on the stock price, taking advantage of shallow TRADING volume.
While the overall STOCK market has been down, the excess put OPTION purchase has exerted added pressure to the price decline.
INSURANCE IN FORCE CLIMBS TO 208.4 BILLION AT MGIC
INSURANCE IN FORCE at MGIC INVESTMENT increased in NOVEMBER and interest rates are declining to a nearly 3 months low according to MORTGAGE NEWS DAILY.
"BY: MATTHEW GRAHAM
Mortgage Rates Lowest Since September After Jobs ReportDec 7 2018, 3:55PM
Mortgage rates held on to their recent improvements today after the important Employment Situation (the big "jobs report") showed November job creation was lower than expected. In general, weaker job creation is good for interest rates because it speaks to slower economic growth and inflation (both of which are enemies of rates). This report was particularly important because a strong result would have cast doubt on several speeches from members of the Federal Reserve. Those speeches have warned about slower economic growth in 2019 and the potential for fewer rate hikes than previously anticipated."
NOVEMBER DEFAULTS DECLINE 47%
Delinquency Notices
November
2018. . . . 2017
4,741 . . . 8,875
https://mtg.mgic.com/news-releases/news-release-details/mgic-investment-corporation-releases-monthly-operating-22
SHORT-TERM DOUBLE BOTTOM FOR MARKETS?
IF SANTA ARRIVES ON SCHEDULE
(market charts for three months for details)
https://stockcharts.com/h-sc/ui
BLACKROCK ON FED'S VIEW ON RATES
CNBC
NOVEMBER 28,2018
"Fed rates could already be at neutral given the pockets of economic weakness
BlackRock global fixed income CIO Rick Rieder sees a December rate hike and then maybe only one or two next year.
However, he says, "Most of the rate adjustment that's priced into the market today has happened."
Rieder's comments come ahead of Fed Chairman Jerome Powell's address to The Economic Club of New York around noon ET on Wednesday."
BLACK KNIGHT: DELINQUENCY RATES DECLINE IN OCTOBER
MORTGAGE NEWS DAILY
NOVEMBER 27, 2018
Mortgage delinquencies spiked in the September "first look" report from Black Knight, but that was followed by a swift reversal in October. The company's latest report notes a sharp decline in early stage delinquencies and a downturn in serious ones as well.
Loans that were more than 30 days past due but not in foreclosure fell 8.2 percent month-over-month and were nearly 18 percent lower than in October 2017. This translates into 165,000 fewer delinquencies than in September and an improvement of 378,000 year-over-year. These changes leave 1.884 million loans in the national non-current bucket. Serious delinquencies were down as well. Within the total number of loans that are overdue just shy of a half million are 90 days delinquent but not in foreclosure, a 12-year low. This is down by 14,000 from September and 90,000 from a year earlier.
Black Knight attributes at least some of the improved loan performance data to continued improvement among hurricane-related delinquencies associated with Harvey and Irma. Yet to be determined are the effects of this fall's hurricanes Florence and Michael as well as from the California.
CASE-SHILLER
HOME PRICES RISE AT 5.1% RATE IN LATEST REPORT
RISING HOME PRICES WILL AID RADIAN AND MGIC INVESTMENT IN LOWERING MITIGATION COSTS/COST PER CLAIM ESPECIALLY, WHEN CLEARING THE STUBBORN DEFAULTS FROM 2008 AND OLDER(see previous post for details)
MARKETWATCH
NOVEMBER 27, 2018
"The numbers: The S&P/Case-Shiller 20-city index was flat on a seasonally adjusted basis in September compared to August, and was 5.1% higher compared to its level a year ago, the lowest annual increase in nearly two years.
The Econoday consensus was for a 0.3% monthly increase for the 20-city index and a 5.3% yearly increase."
MGIC DEFAULT INVENTORY SHRINKING AS HOME PRICES AND SALES RISE
RADIAN"S AND MGIC INVESTMENT DEFAULTS FROM THE "GREAT RECESSION" continue declining as existing homes sales rise and prices maintain height.
On September 30,2018 MGIC reported 12 month or more default inventory had DECLINED from 18.8K a year ago to 14.3K, a 3% decline or 4.5K in defaults from that time frame. That's significant because, they only move down slightly in the past.
In addition, home sales offer opportunities for "new insurance written" for PMI COMPANIES.
TODAY'S REPORT ON EXISTING HOME SALES reports increase in sales:
"Wednesday, November 21, 2018
NAR: Existing-Home Sales Increased to 5.22 million in October
From the NAR: Existing-Home Sales Increase for the First Time in Six Months
Existing-home sales increased in October after six straight months of decreases, according to the National Association of Realtors®. Three of four major U.S. regions saw gains in sales activity last month.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 1.4 percent from September to a seasonally adjusted rate of 5.22 million in October. Sales are now down 5.1 percent from a year ago (5.5 million in October 2017).
...
Total housing inventory at the end of October decreased from 1.88 million in September to 1.85 million existing homes available for sale, but that represents an increase from 1.80 million a year ago. Unsold inventory is at a 4.3-month supply at the current sales pace, down from 4.4 last month and up from 3.9 months a year ago."
THE FED WILL BLINK ON NEXT RATE HIKE
MORTGAGE NEWS DAILY
NOVEMBER 20, 2018
"The Fed will ‘definitely blink’ when it comes to rate hikes, says Jim Grant
Jim Grant, editor and founder of Grant's Interest Rate Observer, discusses whether the Fed might slow its pace of interest rate hikes as market volatility continues to hit U.S. stocks.
http://www.mortgagenewsdaily.com/video/archive/2018/11/20.aspx#885886
SOMEONE REALLY WANTS TO BUY MTG
A CAUTIOUS "ALL ABOARD" I believe is warranted at the current price.
5 MILLION IN BLOCK TRADES MTG AS VOLUME SOARS
MGIC INVESTMENT volume is 3 ×times normal so far, this afternoon!
Mortgage Rates Lowest in a Month
MORTGAGE NEWS DAILY
Nov 16 2018, 6:19PM
Mortgage rates hit their lowest levels of THE month yesterday, and the lowest levels in A month today. It's a bit of a technicality, really. As of yesterday, there were a few days in mid-to-late October that saw lower rates. Today's drop means we'd need to go back to early October to see anything lower.
What's the significance of being at the lowest levels in a month? None, really. It's just really fun to be able to say such things in an environment where such things haven't been easily said for quite some time! Perhaps more relevant and more tangible is the fact that we can say rates are nearly an eighth of a percentage point lower on the week, and that's a decent move regardless of the environment.
MORTGAGE RATES AND DOLLAR INDEX FALL TODAY
BANKRATE
ADRIAN D. GARCIA
Several benchmark mortgage rates dropped today. The average rates on 30-year fixed and 15-year fixed mortgages both slid down. The average rate on 5/1 adjustable-rate mortgages, meanwhile, also dropped.
Meanwhile, the US DOLLAR INDEX fell to 96.55. AS many analysts expect the Fed pullback some of rate hikes scheduled over the next year on the Global economic view.
RADIAN ANNOUNCES THE COMPLETION OF $455 MIL MORT-LINKED NOTES TRANSACTION
Previously, a week ago MGIC INVESTMENT MANAGEMENT completed their $355 MILLION MORTGAGE linked notes deal.
Last week I issued the risk to capital ratios for the four leading PMI COMPANIES. MGICINVESTMENT was the lowest. See this board for details.
"Radian Executes Mortgage Insurance Industry’s First Simultaneous ILN and XOL Reinsurance Placement
By Business Wire, November 15, 2018, 04:30:00 PM EDT
Combined placement totals $455 million, comprised of $434 million of mortgage insurance-linked notes and $21 million of excess-of-loss reinsurance coverage
PHILADELPHIA--(BUSINESS WIRE)-- Radian Group Inc. (NYSE:RDN) today announced that its wholly owned subsidiary, Radian Guaranty Inc., has obtained $434 million of credit risk protection from Eagle Re 2018-1 Ltd. (Eagle Re) through the issuance by Eagle Re of mortgage insurance-linked notes (ILNs) to eligible third-party capital markets investors in an unregistered private offering. Eagle Re is a special purpose insurer domiciled in Bermuda and is not a subsidiary or affiliate of Radian Guaranty. In addition, Radian Guaranty has agreed to terms with a third-party global reinsurer on a separate excess of loss (XOL) reinsurance agreement for $21 million of protection. The ILNs and XOL transfer risk on the same portfolio of eligible mortgage insurance policies issued by Radian Guaranty between January 2017 and December 2017, with the XOL covering a pro rata portion of the risk alongside certain classes of the ILNs.
"At Radian, we have a successful track record of sourcing, underwriting, managing and distributing mortgage credit risk, and we are pleased to execute this combined transaction that is the first of its kind in our industry," said Radian's Chief Executive Officer Rick Thornberry. "We believe there are a number of strategic benefits from leveraging and regularly accessing both the capital and reinsurance markets to distribute risk, including a reduction in our overall cost of capital, increased capital efficiency, and most importantly, the opportunity to reduce portfolio and financial volatility through economic cycles."
MGIC Announces New Integration with ELLIE MAE'S TQL
MGIC ANNOUNCES CLOUD PROGRAM PARTNERSHIP WITH ELLIE MAE. ELLIE MAE processes 35% of UNITED states mortgages.
MILWAUKEE, Nov. 14, 2018 /PRNewswire/ -- Mortgage Guaranty Insurance Corporation (MGIC) (NYSE: MTG), the nation's first private mortgage insurer, and Ellie Mae®, the leading cloud-based platform provider for the mortgage finance industry, announced today the availability of MGIC Rates, Delegated MI, Non-Delegated MI, and Contract Underwriting through Ellie Mae's Total Quality Loan (TQL)® Program.
MGIC mortgage insurance services are now part of Ellie Mae Total Quality Loan (TQL). TQL provides an enhanced MGIC integration that equips our customers with the ability to streamline their rate quote and ordering processes through automation while monitoring key data changes, alerting users of when to re-order a rate quote or MI certificate and driving faster processing times. The new service also offers increased visibility into order history and helps to ensure that data is accurate, organized and securely transmitted.
ALL ABOARD MTG
CONSOLIDATION SHOULD BE OVER SOON!
MEANWHILE:
"MGIC Investment (MTG) PT Set at $17.00 by Susquehanna Bancshares
Posted by Liza Goodheart on Nov 12th, 2018
MGIC Investment Corp. Susquehanna Bancshares set a $17.00 price target on MGIC Investment (NYSE:MTG) in a research note published on Thursday, October 18th. The brokerage currently has a buy rating on the insurance provider’s stock."
PRIVATE CAPITAL PREFERENCE BY TRUMP ADM., DRIVES GROWTH IN PMI INDUSTRY
MGIC INVESTMENT INSURANCE IN FORCE HEADS HIGHER TO $207.5 BILLION as Trump administration prefers private capital for Housing versus increasing FHA.
OCTOBER 2018 OPERATING DATA FOR MGIC:
Insurance in Force (billions)
OCTOBER 2018. ...2017. ....5..
.% increase
$207.5. ..... ....$192.2. 7.9%
Insurance in Force (billions)
$207.5 . . ......$192.2. ..7.9%
Insurance in Force (billions)
$207.5
$192.2
7.9%
www.marketwatch.com/press-release/mgic-investment-corporation-releases-monthly-operating-statistics-2018-11-08
RISK-TO-CAPITAL RATIO 9.8 TO 1 COMBINED MGIC, LOWEST PMI CO.
A QUICK COMPARISON OF THE LEADING PMI COMPANIES risk to capital ratios. These numbers are from third quarter FINANCIAL results and SEC 10Q SEPTEMBER 2018.
MGIC FIRST AT 9.8 TO 1
RADIAN SECOND AT 11.4 TO 1.
NMI HOLDINGS THIRD 13.9 TO 1
ESSENT GUARANTY FOURTH AT 14.1 TO 1.
The higher capital level essentially gives MGIC a competitive advantage in PMI industry. The extra capital can be used to reduce reinsurance cost, payoff debt, strategic opportunity to build insurance portfolio, repurchase company stock or other equity enhancement opportunities.
MGIC waited untilf the final structure of PMIERS 2.0 regulatory requirements was completed to establish the level of capital cushion MGIC had in place.
"September 30, 2018, MGIC’s risk-to-capital ratio was 9.0 to 1, below the maximum allowed by the jurisdictions with State Capital Requirements, and its policyholder position was $2.5 billion above the required MPP of $1.3 billion.
In calculating our risk-to-capital ratio and MPP, we are allowed full credit for the risk ceded under our reinsurance transactions with a group of
unaffiliated reinsurers."
The combined risk-to-capital ratio was 9.0 to 1.
Essent Guaranty risk-to-capital was 14.1 to 1.
MGIC CLOSES NOTES AGREEMENT FOR $318 MILLION
This transaction will expand capital sources while also providing a layer of protection against adverse credit losses.
Today MGIC issued a statement in SEC 10Q ending September 30, 2018 stating, that on October 30, 2018 it closed a deal for $318 MILLION collateralized by MORTGAGE linked notes.
"Note 16. Subsequent Events
On October 30, 2018, MGIC entered into a fully collateralized reinsurance agreement with Home Re 2018-1 Ltd. (“Home Re”), an
unaffiliated special purpose insurer domiciled in Bermuda, that provides for up to $318.6 million of aggregate excess-of-loss reinsurance coverage as of August 1, 2018 on a portfolio of mortgage insurance policies having an insurance coverage in force date on or after July 1, 2016 and before January 1, 2018.
For the reinsurance coverage period, MGIC will retain the first layer of $168.7 million of aggregate losses, and Home Re will then provide second layer coverage up to the outstanding reinsurance coverage amount.
The reinsurance coverage premium due to Home Re is calculated by multiplying the outstanding reinsurance coverage amount at the beginning of a period by a coupon rate, which is the sum of one-month LIBOR plus a spread for each class of notes, and then subtracting actual investment income collected on the assets in the reinsurance trust during that period.
The aggregate excess of loss reinsurance coverage decreases over a ten-year period, subject to certain conditions, as the
underlying covered mortgages amortize, principal is prepaid, or mortgage insurance losses are paid. MGIC has rights to terminate the reinsurance agreement, which includes an option to terminate after seven years from the closing date.
Home Re financed the coverage by issuing mortgage insurance-linked notes in an aggregate amount of $318.6 million to unaffiliated investors.
The notes have ten-year legal maturities and are non-recourse to any assets of MGIC or its affiliates.
The proceeds of the notes were deposited into a reinsurance trust for the benefit of MGIC that will be the source of reinsurance claim payments to MGIC and
principal repayments on the mortgage insurance-linked notes."
Page 36 SEC 10Q SEPT 2018
MGIC INVESTOR SURVEY FOR EXCESS CAPITAL APPLICATION
FINISHED mine this morning:
"Buyback dilutable shares" is my suggestion.
MGIC RISK/CAPITAL RATIO FELL TO 9.8 vs 11.1 Y/O/Y IN Q3 2018
Here's the data from earnings report: Mortgage Guaranty Insurance Corporation - Risk to Capital
Q3 . . . Q2 ... Q1/2018 .. Q4 . Q3/2017
9.0:1 * 9.1:1 ** 9.4:1 ** 9.5:1 **10.1:1
Combined Insurance Companies - Risk to Capital
9.8:1 . 10.0:1 . 10.3:1 . 10.5:1 . 11.1:1
Just for comparison RADIAN GRUOP COMBINED RATIO WAS 11.8:1 IN Q2 2018.
From RADIAN Group SEC 10Q JUNE 30, 2018:
"The Risk-to-capital ratio for our combined mortgage insurance operations was 11.8 to 1 as of June 30, 2018, compared to 12.1 to 1 as of December 31, 2017."
Data shows, that in most cases the capital ratios are improving quarterly. During and after "the great recession", MGIC INVESTMENT struggled to maintain 25.0 to 1 , which has been the maximum state requirement in Wisconsin.
MGIC RISK/CAPITAL RATIO FELL TO 9.8 vs 11.1 Y/O/Y IN Q3 2018
Here's the data from earnings report: Mortgage Guaranty Insurance Corporation - Risk to Capital
Q3 . . . Q2 .. . Q1/2018 .. Q4 .. Q3/2017
9.0:1 * 9.1:1 ** 9.4:1 ** 9.5:1 **10.1:1
Combined Insurance Companies - Risk to Capital
9.8:1 . 10.0:1 . 10.3:1 . 10.5:1 . 11.1:1
Just for comparison RADIAN GRUOP COMBINED RATIO WAS 11.8:1 IN Q3 2018.
From RADIANT Group SEC 10Q JUNE 30, 2018:
"The Risk-to-capital ratio for our combined mortgage insurance operations was 11.8 to 1 as of June 30, 2018, compared to 12.1 to 1 as of December 31, 2017."
Data shows, that in most cases the capital ratios are improving quarterly. During and after "the great recession", MGIC INVESTMENT struggled to maintain 25.0 to 1 , which has been the maximum state requirement in Wisconsin.
My guest, cash $.5 billion share repurchase/equity build
My guest is MGIC MANAGEMENT will be opportunistic in share repurchase or business INVESTMENT opportunities, that can boost equity in the long-term.
Some business opportunities have an open window of time, that will eventually close if, not acted upon...
$318 MILLION BOND PRICING TODAY
MGIC INVESTMENT MANAGEMENT announces BOND PRICING through SEC 8K this morning:
MGIC Investment Corporation is announcing the pricing of $318,636,000 of 10-year mortgage insurance-linked notes issued by Home Re 2018-1
Ltd. (Home Re), a newly formed Bermuda special purpose insurer. The notes are being offered for sale to eligible third party capital markets investors in an unregistered private offering. In connection with the transaction, MGIC Investment Corporation’s wholly owned subsidiary, Mortgage Guaranty Insurance Corporation (MGIC), will receive $318,636,000 of fully collateralized excess of loss reinsurance protection from Home Re at inception, covering an existing portfolio of mortgage insurance policies written with an insurance coverage in force date on or after July 1, 2016,
but before January 1, 2018. The offering is expected to close on or before October 30, 2018, subject to customary conditions. Home Re is not a subsidiary or affiliate of MGIC Investment Corporation.
The mortgage insurance-linked notes to be issued by Home Re will consist of three classes as follows:
$142,449,000 Class M-1 Notes with an initial interest rate of one-month LIBOR plus 160 basis points;
$157,444,000 Class M-2 Notes with an initial interest rate of one-month LIBOR plus 300 basis points; and
$18,743,000 Class B-1 Notes with an initial interest rate of one-month LIBOR plus 400 basis points.
The securities described herein have not been and will not be registered under the U.S. Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. This report shall not constitute an offer to sell or a solicitation of an offer to buy any of the aforementioned securities and shall not constitute an offer, solicitation or sale in any state or jurisdiction in
which, or to any person to whom, such an offer, solicitation or sale would be unlawful.
WHEN MGIC CLOSES BOND ISSUANCE NEXT WEEK, $569 MILLION IN CASH
MGIC MANAGEMENT ask that this news be silent for now...
HOLD CO. CASH INCREASES TO $261 MILLION IN Q3 FROM $192 MILLION IN Q2
"Investments, cash and cash equivalents at the holding company were $261 million as of September 30, 2018, compared to $216 million as of December 31, 2017, and $182 million as of September 30, 2017."
MGIC INVESTMENT MANAGEMENT paid $60 MILLION DIVIDEND to their holding company in Q3 2018, that DIVIDEND exceeded regular quarterly DIVIDEND of $50 million.
No cash was used to repurchase company Stock in Q3. $100 MILLION remains under STOCK repurchase program.
AVERAGE CLAIMS COST DECLINE TO $47.2K FROM $50.2K IN Q3, AS U.S. HOME PRICES RISE
MGIC AND RADIAN CLAIM COST ARE DECLINING AS UNITED STATES HOME PRICES RISE, lowering mitigation costs boosting net income.
MGIC is also lowering the severity of their claim cost to match a brighter outlook.
During the "great recession", that began in 2007 RADIAN and MGIC struggled to survive. Now, both legacy PMI companies are seeing claims cost decline in AVERAGE dollar value and quantity.
48 cents vs ANALYST ESTIMATES 36 cents Q3 2018 EARNINGS
MGIC PRESSER:
"Third Quarter 2018 Net Income of $181.9 million or $0.49 per Diluted Share
Third Quarter 2018 Adjusted Net Operating Income (Non-GAAP) of $180.9 million or $0.48 per Diluted Share
MILWAUKEE, Oct. 17, 2018 /PRNewswire/ -- MGIC Investment Corporation (NYSE: MTG) today reported operating and financial results for the third quarter of 2018. Net income for the quarter was $181.9 million, or $0.49 per diluted share, compared with net income of $120.0 million, or $0.32 per diluted share for the third quarter of 2017."
https://mtg.mgic.com/news-releases/news-release-details/mgic-investment-corporation-reports-third-quarter-2018-results
MGIC RAISING $318 MILLION CASH/CAPITAL BACKED BY REINSURANCE
PRESS RELEASE:
Mortgage Guaranty Insurance Corporation (“MGIC”), the wholly owned subsidiary of MGIC Investment Corporation ("MTG"), intends to proceed with a capital markets-based reinsurance transaction with a newly-formed Bermuda special purpose insurer (the “Issuer”).
In connection with the proposed transaction, (i) MGIC expects to purchase $318.6 million of excess of loss reinsurance protection from the Issuer, covering an existing portfolio of mortgage insurance policies and (ii) the Issuer will simultaneously issue a like amount of unregistered securities to third party capitalmarkets investors that are linked to the reinsurance coverage.
The Issuer is not a subsidiary or affiliate of MGIC.
The mortgage insurance-linked note offering is expected to close by the end of October 2018, subject to market and other customary conditions.
There can be no assurances that such offering or the related reinsurance transaction will be completed.
FAVORABLE LOSS DEVELOPMENT HELPS MGIC PUSH EARNINGS PASS ANALYST'S ESTIMATES
"HIGHER CURE RATES"
HIGHER cures impact MGIC FINANCIAL RESULTS.
"For the six months ended June 30, 2018 and 2017, we experienced favorable loss reserve development on previously received
delinquencies, in large part, due to the resolution of approximately 51% and 48%, respectively, of the prior year delinquent inventory, with improved cure rates.
2017 compared to 2016. Losses incurred, net decreased 78% to $54 million compared to $240 million in 2016. The decrease was due to both a decrease in losses and LAE incurred in respect to delinquencies reported in the currrent year and favorable development on prior year delinquencies."
**INFORMATION FROM SEC 10Q AND SEC 10K REPORTS
ZACKS OCTOBER 15, 2018:
"Why MGIC Investment (MTG) Might Surprise This Earnings Season"
https://m.nasdaq.com/article/why-mgic-investment-mtg-might-surprise-this-earnings-season-cm1037330