Debt

9 Months Ended

Sep. 30, 2023

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, 2023 and December 31, 2022 are presented in table 3.1 below.

Long-term debt obligations
Table	3.1
(In thousands)		September 30, 2023		December 31, 2022
5.25% Notes, due August 2028 (par value: $650 million)		$	642,828	$	641,724
9% Debentures, due April 2063		—		21,086
Long-term debt, carrying value		$	642,828	$	662,810

The 5.25% Senior Notes (5.25% Notes) is an obligation of our holding company, MGIC Investment Corporation.

2023 Transactions

In the third quarter of 2023, under the terms of our 9% Convertible Junior Subordinated Debentures (“9% Debentures”), we exercised our option to redeem the outstanding principal of $21.1 million. The 9% Debentures were convertible into shares of MGIC common stock at a rate of 77.9620 shares per $1,000 principal amount. Prior to the redemption date, substantially all holders elected to convert into shares of common stock. Under the terms of the 9% Debentures, we paid cash of $28.6 million in lieu of issuing shares of common stock. The conversion of our 9% Debentures resulted in a $5.3 million reduction in our shareholders’ equity, net of tax and a reduction of 1.6 million potentially dilutive shares.

See Note 7 - “Debt” in our Annual Report on Form 10-K for the year ended December 31, 2022 for additional information pertaining to our debt obligations, including the conversion feature on the 9% Debentures. As of September 30, 2023 we are in compliance with our debt covenants.

Interest payments

Interest payments for the nine months ended September 30, 2023 and 2022 were $35.1 million and $52.7 million, respectively.