Debt

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Debt

Debt

Debt obligations

The aggregate carrying values of our long-term debt obligations and their par values, if different, as of September 30, 2022 and December 31, 2021 are presented in table 3.1 below.

Long-term debt obligations
Table	3.1
(In millions)		September 30, 2022		December 31, 2021
FHLB Advance - 1.91%, due February 2023		$	—	$	155.0
5.75% Notes, due August 2023		—		241.3
5.25% Notes, due August 2028 (par value: $650 million)		641.4		640.2
9% Debentures, due April 2063 (1)		21.3		110.2
Long-term debt, carrying value		$	662.7	$	1,146.7

(1)Convertible at any time prior to maturity at the holder’s option, at a conversion rate, which is subject to adjustment, of 76.5496 shares per $1,000 principal amount, representing a conversion price of approximately $13.06 per share. The payment of dividends by our holding company results in adjustments to the conversion rate, with such adjustments generally deferred until the end of the year.

The 5.25% Senior Notes (5.25% Notes) and 9% Convertible Junior Subordinated Debentures (“9% Debentures”) are obligations of our holding company, MGIC Investment Corporation.

During the nine months ending September 30, 2022, we repurchased $88.9 million in aggregate principal amount of our 9% Debentures at a purchase price of $120.9 million plus accrued interest. The repurchase of our 9% Debentures resulted in a $32.0 million loss on debt extinguishment on our consolidated statement of operations and a reduction of approximately 6.8 million potentially dilutive shares.

The Federal Home Loan Bank Advance (the “FHLB Advance”) was an obligation of MGIC. In the first quarter of 2022, we repaid the outstanding principal balance of the FHLB Advance at a prepayment price of $156.3 million, incurring a prepayment fee of $1.3 million.

In July 2022, we redeemed the outstanding principal balance of the 5.75% Senior Notes (“5.75% Notes”) at a purchase price of $248.4 million plus accrued interest. The excess of the purchase price over the carrying value, plus the write-off of unamortized issuance costs on the par value, resulted in a $6.8 million loss on debt extinguishment. The 5.75% Notes were an obligation of our holding company.

See Note 7 - “Debt” in our Annual Report on Form 10-K for the year ended December 31, 2021 for additional information pertaining to our debt obligations. As of September 30, 2022 we are in compliance with all of our debt covenants.

Interest payments

Interest payments for the nine months ended September 30, 2022 and 2021 were $52.7 million and $60.0 million, respectively.