Long-Term Debt

The carrying value of our long-term debt at March 31, 2017 and December 31, 2016 was as follows:



(In thousands)		March 31, 2017		December 31, 2016
5.500%	Senior Notes due 2019	$	297,206	$	296,907
5.250%	Senior Notes due 2020	345,618		345,308
7.000%	Senior Notes due 2021	344,650		344,362
3.000%	Convertible Senior Notes due 2017	21,303		20,947
2.250%	Convertible Senior Notes due 2019	—		62,013
	Total long-term debt	$	1,008,777	$	1,069,537

Extinguishment of Debt

Conversion of Convertible Senior Notes due 2019. In November 2016, we announced our intent to exercise our redemption option for the remaining Convertible Senior Notes due 2019. As a result of the average closing price of our common stock exceeding the conversion price of $10.60 prior to the redemption date, all of the holders of these notes elected to exercise their conversion rights. Radian elected to settle all of the notes surrendered for conversion with cash. We settled our obligations on January 27, 2017 with a cash payment of $110.1 million. At the time of settlement, this transaction resulted in a pretax charge of $4.5 million.

Convertible Senior Notes due 2017 and 2019

Upon the original issuance of the Convertible Senior Notes due 2017 and 2019, in accordance with accounting standards related to convertible debt instruments that may be settled in cash upon conversion, the Company recorded a pretax equity component, net of the capped call transaction (with respect to the Convertible Senior Notes due 2017) and related issuance costs (with respect to the Convertible Senior Notes due 2017 and 2019). The pretax equity component is not subject to remeasurement, and therefore remains unchanged unless a reduction of outstanding principal occurs. As a result of settling our obligations on the remaining Convertible Senior Notes due 2019 during the first three months of 2017, the associated remaining pretax equity component of $13.1 million at December 31, 2016 was eliminated. The remaining pretax equity component related to the Convertible Senior Notes due 2017 was $5.0 million at March 31, 2017, unchanged from December 31, 2016.

During the three-month period ended March 31, 2017, Radian Group’s closing stock prices exceeded the thresholds required for the holders of our Convertible Senior Notes due 2017 to be able to exercise their conversion rights during the three-month period ending June 30, 2017. In any period when holders of the Convertible Senior Notes due 2017 are eligible to exercise their conversion option, the equity component related to these instruments is classified as mezzanine (temporary) equity, because we are required to settle the aggregate principal amount of the notes in cash. This equity component is the difference between: (i) the amount of cash deliverable upon conversion (i.e., par value of debt) and (ii) the carrying value of the debt. If in any future period the conversion threshold requirements of our Convertible Senior Notes due 2017 are not met, then the equity component will be reclassified from mezzanine equity to permanent equity, and will continue to be reported as permanent equity for any period in which the debt is not currently convertible.

Issuance and transaction costs incurred at the time of the original issuance of the convertible notes were allocated to the liability and equity components in proportion to the allocation of proceeds and are accounted for as debt issuance costs and equity issuance costs, respectively. The convertible notes are reflected on our condensed consolidated balance sheets as follows:



	Convertible Senior Notes due 2017						Convertible Senior Notes due 2019
(In thousands)	March 31, 2017			December 31, 2016			March 31, 2017		December 31, 2016
Liability component:
Principal	$	22,233		$	22,233		$	—	$	68,024
Debt discount, net (1)	(883		)	(1,221		)	—		(5,461		)
Debt issuance costs (1)	(47		)	(65		)	—		(550		)
Net carrying amount	$	21,303		$	20,947		$	—	$	62,013

Equity component of currently redeemable convertible senior notes	$	883		$	—		$	—	$	—

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(1)	Included within long-term debt and is being amortized over the life of the convertible notes.

The following table sets forth total interest expense recognized related to the convertible notes for the periods indicated:



	Convertible Senior Notes due 2017				Convertible Senior Notes due 2019
	Three Months Ended March 31,				Three Months Ended March 31,
(In thousands)	2017		2016		2017			2016
Contractual interest expense (benefit) (1)	$	167	$	372	$	(510	)	$	2,013
Amortization of debt issuance costs	18		37		16			293
Amortization of debt discount	338		708		163			2,909
Total interest expense (benefit) (1)	$	523	$	1,117	$	(331	)	$	5,215

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(1)	Interest expense (benefit) represents expense incurred, net of adjustments to accruals previously recorded.