MGIC Raising More Cash for Tough Market

MGIC Investment Corp. said it will raise about $420 million in a public offering of 37.3 million shares. The offering last Tuesday was for $350 million in shares.

The company also will sell $325 million of convertible debt into the private market, with an option for the initial buyer to acquire up to an extra $65 million of the debt securities.

MGIC shares fell $1.53, or 11.5 percent, to $11.77 in midday trading. Shares have fallen more than 82 percent from their 52-week high of $67.05.

The company has not given a date when the share offering will go public, but on Monday said Chief Executive Curt S. Culver planned to buy 25,000 shares.

As a growing number of Americans default on mortgages, the holders of those mortgages turn to insurers such as MGIC, making claims to recoup their losses.

MGIC's payouts last year totaled $870 million, a 42 percent increase over 2006.

The company expects to pay up to $2 billion in claims this year.

MGIC reported an annual loss of $1.67 billion in 2007 and said it doesn't expect to turn a profit this year.

The company maintains it has enough cash on hand to pay claims, but has since hardened credit history requirements and demanded larger payments for insured loans.