MGIC to ask shareholders approval to issue more shares

MILWAUKEE—MGIC Investment Corp. will ask shareholders to approve a plan for the company to issue more shares to convert bonds the mortgage insurer is selling.

In a statement Tuesday, MGIC said it will set a date for a special meeting in the next several weeks. At the meeting, shareholders will be asked to approve proposals expanding the number of shares authorized to be issued, and issuing those shares.

MGIC Investment needs to issue more stock because the struggling company sold $365 million in bonds entitling the holders to convert their bonds into stock.

The bonds carry a conversion rate of 74.1 shares per $1,000 in principal, meaning the company has promised to issue 27 million shares to the bondholders if they exercise the option. MGIC Investment has 81.7 million shares outstanding.

If shareholders reject the proposal, MGIC will have to pay the bondholders cash if they convert their bonds.

• Searched
• E-Mailed