Long-Term Debt

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



(In thousands)		September 30, 2017		December 31, 2016
5.500%	Senior Notes due 2019	$	157,470	$	296,907
5.250%	Senior Notes due 2020	231,618		345,308
7.000%	Senior Notes due 2021	194,974		344,362
4.500%	Senior Notes due 2024	442,223		—
3.000%	Convertible Senior Notes due 2017	521		20,947
2.250%	Convertible Senior Notes due 2019	—		62,013
	Total long-term debt	$	1,026,806	$	1,069,537

Extinguishment of Debt

Repurchases of Senior Notes due 2019, 2020 and 2021

During the third quarter of 2017, pursuant to cash tender offers to purchase a portion of our outstanding Senior Notes due 2019, 2020 and 2021, we purchased aggregate principal amounts of $141.4 million, $115.9 million and $152.3 million of our Senior Notes due 2019, 2020 and 2021, respectively. We funded the purchases with $450.0 million in cash (plus accrued and unpaid interest due on the purchased notes). These purchases resulted in a loss on induced conversion and debt extinguishment of $45.8 million. Following these purchases, the remaining principal amounts of the outstanding Senior Notes due 2019, 2020 and 2021 were $158.6 million, $234.1 million and $197.7 million, respectively, at September 30, 2017.

Repurchases of Convertible Senior Notes due 2017

During the second quarter of 2017, we purchased an aggregate principal amount of $21.6 million of our outstanding Convertible Senior Notes due 2017. 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. As of September 30, 2017, $0.5 million of the principal amount of the Convertible Senior Notes due 2017 remained outstanding and mature in November 2017.

In connection with our 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 $68.0 million aggregate principal amount of our 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.

Senior Notes due 2024

In September 2017, we issued $450 million aggregate principal amount of Senior Notes due 2024 and received net proceeds of $443.3 million. These notes mature on October 1, 2024 and bear interest at a rate of 4.500% per annum, payable semi-annually on April 1 and October 1 of each year, with interest payments commencing on April 1, 2018.

We have the option to redeem these notes, in whole or in part, at any time or from time to time prior to July 1, 2024 (the “Par Call Date”) at a redemption price equal to the greater of: (i) 100% of the aggregate principal amount of the notes to be redeemed and (ii) the make-whole amount, which is the sum of the present values of the remaining scheduled payments of principal and interest in respect of the notes to be redeemed, calculated from the redemption date to the Par Call Date, discounted to the redemption date at the applicable treasury rate plus 50 basis points, plus, in each case, accrued and unpaid interest thereon to, but excluding, the redemption date. At any time on or after the Par Call Date, we may, at our option, redeem the notes in whole or in part at a redemption price equal to 100% of the aggregate principal amount of the notes to be redeemed, plus accrued and unpaid interest thereon to, but excluding, the redemption date.

The indenture governing the Senior Notes due 2024 contains covenants customary for securities of this nature, including covenants related to the payments of the notes, reports, compliance certificates and modification of the covenants. Additionally, the indenture includes covenants restricting us from encumbering the capital stock of a designated subsidiary (as defined in the indenture for the notes) or disposing of any capital stock of any designated subsidiary unless either all of the stock is disposed of or we retain more than 80% of the stock.

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 September 30, 2017, as a result of our purchases of the associated notes during 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.

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 of our Convertible Senior Notes due 2017 may submit their notes for conversion regardless of the stock price or other conversion thresholds. During the same period, however, we have the option to call the Convertible Senior Notes due 2017. Therefore, at September 30, 2017, the pretax equity component associated with our Convertible Senior Notes due 2017 is not subject to reclassification as mezzanine (temporary) equity, and is classified as permanent equity. See Note 12 of Notes to Consolidated Financial Statements in our 2016 Form 10-K for additional information.

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)	September 30, 2017			December 31, 2016			September 30, 2017		December 31, 2016
Liability component:
Principal	$	526		$	22,233		$	—	$	68,024
Debt discount, net (1)	(5		)	(1,221		)	—		(5,461		)
Debt issuance costs (1)	—			(65		)	—		(550		)
Net carrying amount	$	521		$	20,947		$	—	$	62,013

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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 September 30,				Nine Months Ended September 30,
(In thousands)	2017		2016		2017		2016
Contractual interest expense (benefit) (1)	$	4	$	166	$	312	$	705
Amortization of debt issuance costs	—		17		32		71
Amortization of debt discount	10		322		615		1,344
Total interest expense (benefit) (1)	$	14	$	505	$	959	$	2,120

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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 September 30,				Nine Months Ended September 30,
(In thousands)	2017		2016		2017			2016
Contractual interest expense (benefit) (1)	$	—	$	493	$	(510	)	$	3,043
Amortization of debt issuance costs	—		74		16			447
Amortization of debt discount	—		737		163			4,434
Total interest expense (benefit) (1)	$	—	$	1,304	$	(331	)	$	7,924

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