Borrowings and Financing Activities

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Borrowings and Financing Activities

12. Borrowings and Financing Activities

As of the dates indicated, the carrying value of our debt, excluding our securitized nonrecourse debt related to consolidated VIEs as discussed in Note 7, was as follows.

Borrowings
($ in thousands)	Interest rate			September 30, 2024		December 31, 2023
Senior notes
Senior Notes due 2024		4.500	%	$	—	$	449,037
Senior Notes due 2025		6.625	%		—		522,343
Senior Notes due 2027		4.875	%		447,191		446,401
Senior Notes due 2029		6.200	%		617,527		—
Total senior notes				$	1,064,718	$	1,417,781

($ in thousands)	Average interest rate (1)			September 30, 2024		December 31, 2023
Secured borrowings
FHLB advances
FHLB advances due 2024 (2)		4.776	%	$	31,958	$	72,871
FHLB advances due 2025		2.340	%		12,684		12,684
FHLB advances due 2026		4.469	%		1,835		1,835
FHLB advances due 2027		2.562	%		7,887		7,887
Total FHLB advances					54,364		95,277
Mortgage loan financing facilities		6.507	%		497,552		24,199
Total secured borrowings				$	551,916	$	119,476

(1)As of September 30, 2024. See “FHLB Advances” and “Mortgage Loan Financing Facilities” below for more information.

(2)Includes 5.602% as of December 31, 2023, which resets daily based on changes in SOFR.

Interest expense consisted of the following.

Interest expense
	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2024		2023		2024		2023
Senior notes	$	20,945	$	20,320	$	64,229	$	60,911
Mortgage loan financing facilities		7,500		1,609		14,045		2,086
Loss on extinguishment of debt		—		—		4,275		—
FHLB advances		538		1,039		2,027		2,395
Revolving credit facility		408		310		925		1,020
Other		—		4		—		114
Total interest expense	$	29,391	$	23,282	$	85,501	$	66,526

Senior Notes

Senior Notes due 2029. In March 2024, we issued $625 million aggregate principal amount of Senior Notes due 2029 and received net proceeds of $617 million. These notes mature on May 15, 2029, and bear interest at a rate of 6.200% per annum, payable semi-annually on May 15 and November 15 of each year, with interest payments commencing on November 15, 2024.

We have the option to redeem these notes, in whole or in part, at any time, or from time to time, prior to April 15, 2029 (the date that is one month prior to the maturity date of the notes) (the “Par Call Date”), at a redemption price equal to the greater of (a) 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 discounted to the redemption date (assuming the Senior Notes due 2029 matured on the Par Call Date) on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the applicable treasury rate plus 30 basis points less interest accrued to the redemption date, and (b) 100% of the aggregate principal amount of the notes to be redeemed, plus, in either 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 2029 contains covenants customary for securities of this nature, including covenants related to the payments of the notes, reports to be provided, compliance certificates to be issued and the ability to modify 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 for cash or property which is at least equal to the fair market value of the stock or we retain more than 80% of the stock.

Extinguishment of Debt

Redemption of Senior Notes due 2025. In March 2024, we exercised our right to redeem all of our outstanding Senior Notes due 2025 in the aggregate principal amount of $525 million, at a redemption price of 100.4% of the principal amount plus accrued and unpaid interest. We funded the redemption with $527 million in cash (which included accrued and unpaid interest due on the redeemed notes). This redemption resulted in a loss on extinguishment of debt of $4 million during the three months ended March 31, 2024, which is included in interest expense in our condensed consolidated statements of operations.

Redemption of Senior Notes due 2024. In September 2024, we redeemed the outstanding aggregate principal amount of $450 million of our outstanding Senior Notes due 2024. We funded the redemption with $460 million in cash (which included accrued and unpaid interest due on the redeemed notes).

Following these redemptions, there were no remaining principal amounts outstanding on the Senior Notes due 2025 or the Senior Notes due 2024 at September 30, 2024.

FHLB Advances

The principal balance of the FHLB advances is required to be collateralized by eligible assets with a fair value that must be maintained generally within a minimum range of 103% to 114% of the amount borrowed, depending on the type of assets pledged. Our investments include securities totaling $57 million and $101 million at September 30, 2024, and December 31, 2023, respectively, which serve as collateral for our FHLB advances to satisfy this requirement.

Mortgage Loan Financing Facilities

Radian Mortgage Capital has entered into the Master Repurchase Agreements to finance the acquisition of residential mortgage loans and related mortgage loan assets. Pursuant to the Master Repurchase Agreements, Radian Mortgage Capital may from time to time sell, and later repurchase, certain residential mortgage loan assets. The maximum borrowing amounts under the JP Morgan Master Repurchase Agreement, the Goldman Sachs Master Repurchase Agreement and the BMO Master Repurchase Agreement are $150 million $200 million and $400 million, respectively. The JP Morgan Master Repurchase Agreement, the Goldman Sachs Master Repurchase Agreement and the BMO Master Repurchase Agreement are currently scheduled to expire on January 27, 2025, May 31, 2025 and September 24, 2025, respectively.

The borrowings under the Master Repurchase Agreements bear a variable interest rate based on one-month SOFR or compounded SOFR, depending on the agreement, plus an applicable margin, with interest payable monthly. Principal is due upon the earliest of the sale or disposition of the related mortgage loans, the occurrence of certain default or acceleration events or at the termination date of the applicable Master Repurchase Agreement.

Funds advanced under the Master Repurchase Agreements generally will be calculated as a percentage of the unpaid principal balance or fair value of the residential mortgage loan assets, depending on the credit characteristics of the loans being purchased. Of our residential mortgage loans held for sale, $528 million and $31 million served as collateral for the Master Repurchase Agreements to support the funds advanced at September 30, 2024, and December 31, 2023, respectively.

Revolving Credit Facility

Radian Group has in place a $275 million unsecured revolving credit facility with a syndicate of bank lenders. As of September 30, 2024, there were no amounts outstanding under this facility.

Debt Covenants and Other Information

As of September 30, 2024, we are in compliance with all of our debt covenants, including for our senior notes. For more information regarding our borrowings and financing activities, including certain terms, covenants and Parent Guarantees provided by Radian Group in connection with particular borrowings, see Note 12 of Notes to Consolidated Financial Statements in our 2023 Form 10-K.