Radian agrees to amendments to revolving credit line

PHILADELPHIA—Mortgage insurer Radian Group Inc. said Thursday it amended its revolving credit agreement, shrinking it substantially.

The amendment will remove any minimum credit rating requirements Radian Group would need to hold, and it would reduce the minimum net worth the company needs to keep. In return Radian will convert the facility to a secured line of credit and the size will be reduced to $250 million from $400 million.

The size could be reduced further based on certain repayment triggers.

The amended line will mature in February 2011.

Like other mortgage insurers, Radian has been hit hard by deterioration in the market. As mortgages have increasingly defaulted since the middle of 2007, Radian's claims payments have increased. The rising claims and weakening mortgage market led the mortgage insurer to lose $1.19 billion in 2007. Radian has yet to announce its first-quarter results.

Because of its struggling business, Radian has faced downgrades from credit ratings agencies as well. In early April, Standard & Poor's cut Radian's credit rating along with other mortgage insurers. Radian's rating was cut to "BBB" from "A-." Both are considered investment grade.