Long-Term Debt

The carrying value of our long-term debt at June 30, 2017 and December 31, 2016 was as follows:



(In thousands)		June 30, 2017		December 31, 2016
5.500%	Senior Notes due 2019	$	297,510	$	296,907
5.250%	Senior Notes due 2020	345,932		345,308
7.000%	Senior Notes due 2021	344,943		344,362
3.000%	Convertible Senior Notes due 2017	625		20,947
2.250%	Convertible Senior Notes due 2019	—		62,013
	Total long-term debt	$	989,010	$	1,069,537

Extinguishment of Debt

Repurchases of Convertible Senior Notes due 2017

During the second quarter of 2017, we entered into privately negotiated agreements to purchase a portion of our outstanding Convertible Senior Notes due 2017 in an aggregate principal amount of $21.6 million. We funded the purchases with $31.6 million in cash (plus accrued and unpaid interest due on the purchased notes). These purchases of Convertible Senior Notes due 2017 resulted in a loss on induced conversion and debt extinguishment of $1.2 million. Following these purchases, $0.6 million of the principal amount of the Convertible Senior Notes due 2017 remained outstanding as of June 30, 2017.

In connection with our privately negotiated purchases of Convertible Senior Notes due 2017, we terminated a corresponding portion of the capped call transactions we entered into in 2010 related to the initial issuance of the Convertible Senior Notes due 2017. We received proceeds of $4.1 million for this termination.

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 with respect to these conversions 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. The pretax equity component associated with our Convertible Senior Notes due 2017 decreased from $5.0 million at December 31, 2016 to $0.1 million at June 30, 2017, as a result of our purchases of the associated notes during the second quarter of 2017. In addition, as a result of settling our obligations on the remaining Convertible Senior Notes due 2019 during the first three months of 2017, the associated pretax equity component of $13.1 million at December 31, 2016 was eliminated.

During the three-month period ended June 30, 2017, Radian Group’s closing stock prices exceeded the conversion threshold requirements for the holders of our Convertible Senior Notes due 2017 to be able to exercise their conversion rights during the three-month period ending September 30, 2017. Additionally, beginning on August 15, 2017 until the close of business on November 13, 2017 (the second scheduled trading day immediately preceding the maturity date), holders may submit their notes for conversion regardless of the stock price or other conversion thresholds. 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.

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)	June 30, 2017			December 31, 2016			June 30, 2017		December 31, 2016
Liability component:
Principal	$	642		$	22,233		$	—	$	68,024
Debt discount, net (1)	(16		)	(1,221		)	—		(5,461		)
Debt issuance costs (1)	(1		)	(65		)	—		(550		)
Net carrying amount	$	625		$	20,947		$	—	$	62,013

Equity component of currently redeemable convertible senior notes	$	16		$	—		$	—	$	—

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

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



	Convertible Senior Notes due 2017
	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2017		2016		2017		2016
Contractual interest expense (benefit) (1)	$	141	$	167	$	308	$	539
Amortization of debt issuance costs	14		17		32		54
Amortization of debt discount	267		314		605		1,022
Total interest expense (benefit) (1)	$	422	$	498	$	945	$	1,615

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



	Convertible Senior Notes due 2019
	Three Months Ended June 30,				Six Months Ended June 30,
(In thousands)	2017		2016		2017			2016
Contractual interest expense (benefit) (1)	$	—	$	537	$	(510	)	$	2,550
Amortization of debt issuance costs	—		80		16			373
Amortization of debt discount	—		788		163			3,697
Total interest expense (benefit) (1)	$	—	$	1,405	$	(331	)	$	6,620

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