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Oct. 31, 2012 /PRNewswire/ -- MGIC Investment Corporation (NYSE: MTG) announced the following update on the status of the matters in the
August 1, 2012 letter from Freddie Mac, as amended by Freddie Mac's
September 28, 2012 letter (collectively, the Freddie Mac Letter).
Freddie Mac has confirmed that its condition that agreement be reached on substantially all terms of a settlement of the pool insurance dispute between MTG's Mortgage Guaranty Insurance Corporation subsidiary (MGIC) and Freddie Mac has been met for purposes of continuing toward resolution. The principal economic terms concerning the amount of payments in settlement of MGIC's obligations under the policies at issue have been agreed upon. The majority of these payments to Freddie Mac will be made over a period of four years after the signing of the definitive agreement, with the remainder to be paid at signing. However, MGIC and Freddie Mac still must agree to certain issues that are significant to final resolution. All terms of the settlement will be included in a definitive settlement agreement, which MGIC, Freddie Mac and FHFA are negotiating. This agreement will be subject to approval by the Boards of Directors of MGIC and Freddie Mac and by FHFA. The communications of the parties to third persons about the pool insurance dispute remain subject to a confidentiality agreement with Freddie Mac. As a result, MTG can make no further comment about the terms of the proposed settlement.
If MGIC's and Freddie Mac's Boards of Directors and FHFA approve a final settlement agreement, any definitive settlement agreement would only be signed concurrently with the satisfaction of the other conditions in the Freddie Mac Letter. These are (1) by
December 1, 2012, MTG must contribute
$100 million to MGIC, and (2) by
December 31, 2012, the Office of the Commissioner of Insurance of
Wisconsin must provide confirmation to Freddie Mac of the availability of the capital of MGIC Indemnity Corporation, a subsidiary of MGIC, to pay claims on MGIC policies. These conditions are further described in MTG's
September 28, 2012 press release, which also notes that Freddie Mac's approval of MIC may be withdrawn at any time.
Curt Culver, Chairman and CEO of MTG and MGIC, said "I am happy MIC along with MGIC continue as eligible insurers for Freddie Mac and
Fannie Mac and remain pleased with the spirit of cooperation all parties have again demonstrated in moving forward to reach this point. While there can be no guaranty the open matters can be successfully resolved, I am hopeful we will continue to make progress."
Additionally MTG announced plans to release its 3
rd quarter 2012 financial results before the market opens on
Friday, November 9, 2012. A conference call/webcast has been scheduled for
10:00 a.m. Eastern Time to allow securities analysts and shareholders the opportunity to hear Management discuss the Company's results for the quarter ended
September 30, 2012.
To attend the webcast, go to
http://mtg.mgic.com, click on the "Investor Information" button. The call will be broadcast live over the internet, and replays will be available on the web following the call.
Individuals interested in joining over the phone please dial 1-866-847-7859 ten minutes before the conference call begins.