RADIAN GROUP INC FILES (8-K) Disclosing Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Financial Statements and Exhibits - Insurance News | InsuranceNewsNet

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July 18, 2022 Newswires
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RADIAN GROUP INC FILES (8-K) Disclosing Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant, Financial Statements and Exhibits

Edgar Glimpses

Item 1.01. Entry into a Material Definitive Agreement.

On July 15, 2022, Radian Group Inc. (the "Company") entered into a Guaranty
Agreement (the "Parent Guaranty") in favor of Goldman Sachs Bank USA ("Goldman")
to guaranty the obligations of the Company's subsidiaries Radian Mortgage
Capital LLC
( "RMC") and Radian Liberty Funding LLC ("Liberty") in connection
with a $300 million mortgage loan repurchase facility that RMC and Liberty have
entered into with Goldman pursuant to a Master Repurchase Agreement, as more
fully described below (the "Mortgage Financing Facility"). The Company expects
that this financing facility will be used to finance RMC's acquisition of
residential mortgage loans that are purchased from correspondent lenders and
held by RMC for later securitization and/or direct sale to mortgage investors.

RMC's and Liberty's obligations under the Master Repurchase Agreement and the
Guaranty and Security Agreement

On July 15, 2022, RMC and its wholly-owned subsidiary Liberty entered into a
Master Repurchase Agreement (the "Master Repurchase Agreement") among Liberty,
Goldman and RMC, pursuant to which Liberty may from time to time sell to
Goldman, and later repurchase, certain Participation Interests (as defined in
the Master Repurchase Agreement) in residential mortgage loan assets. The
obligations of Liberty under the Master Repurchase Agreement are guaranteed by
RMC pursuant to a Guaranty and Security Agreement (the "Guaranty and Security
Agreement") executed contemporaneously with the Master Repurchase Agreement. The
Master Repurchase Agreement will expire on July 14, 2023, unless the agreement
is extended or terminated earlier.

The Mortgage Financing Facility is uncommitted, and Goldman is under no
obligation to fund the purchase of any residential mortgage loan assets under
this facility. In the event Goldman advances funds under the Mortgage Financing
Facility, the amount of such advances generally will be calculated as a
percentage of the unpaid principal balance or market value of the residential
mortgage loan assets, depending on the credit characteristics of the loans being
purchased. The interest rate on any outstanding balance under the Master
Repurchase Agreement that Liberty would be required to pay to Goldman is
customary for this type of transaction, where the interest rate is equal to the
sum of (1) a pricing spread and (2) compounded SOFR for each business day the
whole loan asset is held by Goldman until the day that the whole loan asset is
repurchased by Liberty.

The Master Repurchase Agreement contains provisions that provide Goldman with
certain rights in the event of a decline in the market value of the purchased
residential mortgage loan assets. Under these provisions, Goldman may require
Liberty to transfer cash or additional eligible residential mortgage loan assets
with an aggregate market value that is equal to the difference between the value
of the residential mortgage loan assets then subject to the Master Repurchase
Agreement and a minimum threshold amount.

--------------------------------------------------------------------------------

In addition, the Master Repurchase Agreement contains events of default (subject
to certain materiality thresholds and grace periods), including payment
defaults, breaches of covenants and/or certain representations and warranties,
cross-defaults, insolvency and other events of default customary for this type
of transaction. The remedies for such events of default are also customary for
this type of transaction and include (in some cases after grace and cure
periods) the acceleration of the amounts outstanding under the Master Repurchase
Agreement and Goldman's right to liquidate the Participation Interests and/or
residential mortgage loan assets then subject to the Master Repurchase
Agreement.

In connection with this facility, Liberty is also required to pay certain
customary fees to Goldman to reimburse Goldman for certain costs and expenses
incurred in connection with Goldman's management and ongoing administration of
the Master Repurchase Agreement and its review of the residential mortgage loan
assets subject to the Master Repurchase Agreement.

The Company's obligations under the Parent Guaranty

The obligations of RMC and Liberty under the Master Repurchase Agreement and the
Guaranty and Security Agreement are fully guaranteed by the Company pursuant to
the Parent Guaranty executed contemporaneously with the Master Repurchase
Agreement. Pursuant to the Parent Guaranty, the Company is subject to negative
and affirmative covenants customary for this type of financing transaction,
including, among others: (a) limitations on the incurrence of debt;
(b) restrictions on certain transactions with affiliates, payments and
investments; and (c) a requirement that Radian Guaranty Inc. maintain its
eligibility as a private mortgage insurer with Freddie Mac and Fannie Mae. The
Parent Guaranty also contains various financial covenants that the Company must
remain in compliance with, including those related to (a) the total adjusted
capital of the Company's primary mortgage insurance subsidiaries, Radian
Guaranty Inc.
and Radian Reinsurance Inc., (b) the Company's minimum
consolidated net worth, and (c) the Company's maximum Debt-to-Total
Capitalization Ratio. The covenants and financial covenants in the Parent
Guaranty are generally consistent with the comparable covenants in the Company's
previously disclosed revolving credit facility, dated as of December 7, 2021,
with Royal Bank of Canada, as Administrative Agent (the "Agent") and certain
other lenders.

The foregoing summary is not a complete description of the Master Repurchase
Agreement, the Guaranty and Security Agreement, or the Parent Guaranty. The
descriptions of these agreements are qualified in their entirety by reference to
the full text of the agreements which are filed as exhibits to this Current
Report on Form 8-K and are incorporated herein by reference.

The Master Repurchase Agreement is attached hereto as Exhibit 10.1, the Guaranty
and Security Agreement is attached hereto as Exhibit 10.2, and the Parent
Guaranty is attached hereto as Exhibit 10.3.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an

           Off-Balance Sheet Arrangement of a Registrant.


The information required by Item 2.03 contained in Item 1.01 of this Current
Report on Form 8-K is incorporated herein by reference.

--------------------------------------------------------------------------------

Item 9.01. Financial Statements and Exhibits.


(d) Exhibits

  Exhibit
    No.                                     Description

Exhibit 10.1      Master Repurchase Agreement , dated July 15, 2022, among Goldman
                Sachs Bank USA, , a national banking institution ("Buyer"), Radian
                Liberty Funding LLC, a Delaware limited liability company
                ("Seller"), and Radian Mortgage Capital LLC, a Delaware limited
                liability company ("Guarantor")

Exhibit 10.2      Guaranty and Security Agreement dated as of July 15, 2022 (this
                "Guaranty"), made by Radian Mortgage Capital LLC, a Delaware
                limited liability company ("Guarantor"), in favor of Goldman Sachs
                Bank USA, a national banking institution ("Buyer")

Exhibit 10.3      Guaranty Agreement dated as of July 15, 2022 (this "Guaranty"),
                made by Radian Group Inc., a Delaware corporation ("Parent
                Guarantor"), in favor of Goldman Sachs Bank USA, a national banking
                institution ("Buyer")

Exhibit 104     Cover Page Interactive Data File (embedded within the Inline XBRL
                document)

--------------------------------------------------------------------------------

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