As filed with the Securities and Exchange Commission on March 19, 2007

Registration No. 333-      

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form S-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

 

 

MGIC INVESTMENT CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

MGIC Plaza

250 East Kilbourn Avenue

Milwaukee, Wisconsin 53202

(414) 347-6480

(Address, including zip code, and telephone number, including

area code, of registrant’s principal executive offices)

Jeffrey H. Lane

Senior Vice President, Secretary and General Counsel

MGIC Investment Corporation

MGIC Plaza

250 East Kilbourn Avenue

Milwaukee, Wisconsin 53202

(414) 347-6480

(Name, address, including zip code, and telephone number,

Including area code, of agent for service)

 

With copies to:

 

 

 

Approximate date of commencement of proposed sale of the securities to the public:  As soon as practicable after this Registration Statement becomes effective and all other conditions to the proposed merger described herein have been satisfied or waived.

 

If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.  o

 

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

 

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

 

 

CALCULATION OF REGISTRATION FEE

 

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

 

Explanatory Note

 

This registration statement contains two forms of the joint proxy statement/prospectus delivered separately to stockholders of MGIC Investment Corporation and Radian Group Inc. in connection with their respective annual meetings. The joint proxy statement/prospectus to be delivered to MGIC stockholders in connection with the MGIC-Radian merger described in this document will contain a letter to MGIC stockholders and a notice of the MGIC annual meeting, as well as a separate table of contents and a separate section at the end of the joint proxy statement/prospectus containing information on the election of MGIC directors to serve for terms of three years until their successors are duly elected and qualified, the ratification of the selection of an independent registered public accounting firm, and the adjournment of the MGIC annual meeting if necessary to allow for the solicitation of additional proxies. Similarly, the joint proxy statement/prospectus to be delivered to Radian stockholders in connection with the merger will contain a letter to Radian stockholders and a notice of the Radian annual meeting, as well as a separate table of contents and a separate section at the end of the joint proxy statement/prospectus containing information on the election of Radian directors to serve until the next annual meeting of stockholders of Radian until their successors are duly elected and qualified, the ratification of the selection of an independent registered public accounting firm, and the adjournment of the Radian annual meeting if necessary to allow for the solicitation of additional proxies.

 

 

[MGIC ALTERNATE PAGE]

 

Preliminary Joint Proxy Statement/Prospectus

 

Subject To Completion, Dated March 19, 2007

 

 

TO THE STOCKHOLDERS OF
MGIC INVESTMENT CORPORATION

 

A MERGER PROPOSAL — YOUR VOTE IS VERY IMPORTANT

 

We are pleased to report that the boards of directors of MGIC Investment Corporation (“MGIC”) and Radian Group Inc. (“Radian”) have unanimously approved a strategic merger involving the two companies. Before the merger can be completed, the approval of the stockholders of both MGIC and Radian must be obtained. We are sending you this joint proxy statement/prospectus to ask you to vote in favor of adoption of the merger agreement.

 

In the merger, Radian will merge with and into MGIC. If the merger is completed, Radian stockholders will receive 0.9658 shares of MGIC common stock for each share of Radian common stock held immediately prior to the merger. After completion of the merger, we expect that current MGIC stockholders will own approximately 52% of the combined company and Radian stockholders will own approximately 48% of the combined company.

 

The exchange ratio in the merger is fixed and will not be adjusted to reflect stock price changes prior to completion of the merger. Based on the closing price of MGIC common stock on the New York Stock Exchange on February 5, 2007, the last full trading day before public announcement of the merger, the 0.9658 exchange ratio represents approximately $60.78 in value for each share of Radian common stock. Based on the closing price of MGIC common stock on the New York Stock Exchange on [          , 2007], the latest practicable date before the date of this joint proxy statement/prospectus, the 0.9658 exchange ratio represents approximately [$  .  ] in value for each share of Radian common stock.

 

You should obtain current market quotations for both MGIC common stock and Radian common stock.  MGIC common stock is listed on the New York Stock Exchange under the symbol “MTG.” Radian common stock is listed on the New York Stock Exchange under the symbol “RDN.”

 

[MGIC ALTERNATE PAGE]

The merger is intended to be generally tax-free to MGIC stockholders.

 

The merger cannot be completed unless MGIC stockholders and Radian stockholders adopt the merger agreement. At our 2007 annual meeting, which will be held on May 10, 2007, we will ask our stockholders to approve the merger agreement, in addition to other business that stockholders will conduct. Your vote is important. Whether or not you plan to attend our annual meeting, please take the time to submit your proxy with voting instructions in accordance with the instructions contained in this joint proxy statement/prospectus. If you do not vote, it will have the same effect as voting against the merger. The place, date and time of the meeting are as follows:

 

May 10, 2007
9:00 a.m. (local time)
Marcus Center for the Performing Arts
929 North Water Street
Milwaukee, Wisconsin

 

MGIC’s Board of Directors Unanimously Recommends That MGIC Stockholders Vote For Adoption of the Merger Agreement.

 

We urge you to read this joint proxy statement/prospectus, and the documents incorporated by reference into this joint proxy statement/prospectus, carefully and in their entirety. In particular, see the section entitled “Risk Factors” beginning on page 19.

 

We are very excited about the opportunities the proposed merger brings to our stockholders and we thank you for your consideration and continued support.

 

 

Curt S. Culver
Chief Executive Officer
MGIC Investment Corporation

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the MGIC common stock to be issued under this joint proxy statement/prospectus or determined if this joint proxy statement/prospectus is accurate or adequate. Any representation to the contrary is a criminal offense.

 

The date of this joint proxy statement/prospectus is [          , 2007], and it is first being mailed to MGIC stockholders on or about [          , 2007].

 

[MGIC ALTERNATE PAGE]

 

MGIC INVESTMENT CORPORATION
MGIC Plaza
250 East Kilbourn Avenue
Milwaukee, Wisconsin 53202

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on May 10, 2007

 

MGIC Investment Corporation (“MGIC”) will hold an annual meeting of MGIC stockholders at the Marcus Center for the Performing Arts, 929 North Water Street, Milwaukee, Wisconsin, at 9:00 a.m. local time, on May 10, 2007 to consider and vote upon the following matters:

 

 

Upon completion of the merger, MGIC will be the surviving corporation, and each share of Radian common stock will be converted into 0.9658 shares of MGIC common stock. Your attention is directed to the joint proxy statement/prospectus accompanying this notice for a complete discussion of the merger. A copy of the merger agreement is included as Annex A to the accompanying joint proxy statement/prospectus.

 

The board of directors has fixed the close of business on March 9, 2007 as the record date for the MGIC annual meeting. MGIC stockholders of record at such time are entitled to notice of, and to vote at, the MGIC annual meeting or any adjournment or postponement of the MGIC annual meeting.

 

Whether or not you plan to attend the MGIC annual meeting, please submit your proxy with voting instructions. To submit your proxy by mail, please complete, sign, date and return the accompanying proxy card in the enclosed self-addressed, stamped envelope. This will not prevent you from voting in person, but it will help to secure a quorum and avoid added solicitation costs. Any holder of MGIC common stock who is present at the MGIC annual meeting may vote in person instead of by proxy, thereby canceling any previous proxy. Also, a proxy may be revoked in writing at any time before the MGIC annual meeting.

 

[MGIC ALTERNATE PAGE]

 

The MGIC board of directors has unanimously approved the merger agreement and unanimously recommends that MGIC stockholders vote “FOR” adoption of the merger agreement, and “FOR” approval of the adjournment of the MGIC annual meeting, if necessary or appropriate to solicit additional proxies.

 

By Order of the Board of Directors,

 

 

Jeffrey H. Lane
Senior Vice President,
General Counsel and Secretary

 

Milwaukee, Wisconsin

[          , 2007]

[RADIAN ALTERNATIVE PAGE]

 

Preliminary Joint Proxy Statement/Prospectus

 

Subject To Completion, Dated March 19, 2007

 

 

TO THE STOCKHOLDERS OF
RADIAN GROUP INC.

 

A MERGER PROPOSAL — YOUR VOTE IS VERY IMPORTANT

 

We are pleased to report that the boards of directors of MGIC Investment Corporation (“MGIC”) and Radian Group Inc. (“Radian”) have unanimously approved a strategic merger involving the two companies. Before the merger can be completed, the approval of the stockholders of both MGIC and Radian must be obtained. We are sending you this joint proxy statement/prospectus to ask you to vote in favor of adoption of the merger agreement.

 

In the merger, Radian will merge with and into MGIC. If the merger is completed, Radian stockholders will receive 0.9658 shares of MGIC common stock for each share of Radian common stock held immediately prior to the merger. After completion of the merger, we expect that current MGIC stockholders will own approximately 52% of the combined company and Radian stockholders will own approximately 48% of the combined company.

 

The exchange ratio in the merger is fixed and will not be adjusted to reflect stock price changes prior to completion of the merger. Based on the closing price of MGIC common stock on the New York Stock Exchange on February 5, 2007, the last full trading day before public announcement of the merger, the 0.9658 exchange ratio represents approximately $60.78 in value for each share of Radian common stock. Based on the closing price of MGIC common stock on the New York Stock Exchange on [          , 2007], the latest practicable date before the date of this joint proxy statement/prospectus, the 0.9658 exchange ratio represents approximately [$     .          ] in value for each share of Radian common stock.

 

You should obtain current market quotations for both MGIC common stock and Radian common stock. MGIC common stock is listed on the New York Stock Exchange under the symbol “MTG.” Radian common stock is listed on the New York Stock Exchange under the symbol “RDN.”

 

[RADIAN ALTERNATIVE PAGE]

The merger is intended to be generally tax-free to Radian stockholders other than with respect to any cash that Radian stockholders receive instead of receiving fractional shares of MGIC common stock.

 

The merger cannot be completed unless MGIC stockholders and Radian stockholders adopt the merger agreement. At our 2007 annual meeting, which will be held on May 9, 2007, we will ask our stockholders to approve the merger agreement, in addition to other business that stockholders will conduct. Your vote is important. Whether or not you plan to attend our annual meeting, please take the time to submit your proxy with voting instructions in accordance with the instructions contained in this joint proxy statement/prospectus. If you do not vote, it will have the same effect as voting against the merger. The place, date and time of our annual meeting are as follows:

 

May 9, 2007
9:00 a.m. (local time)
The Westin Philadelphia
99 South 17th Street
Philadelphia, Pennsylvania 19103

 

Radian’s Board of Directors Unanimously Recommends That Radian Stockholders Vote For Adoption of the Merger Agreement.

 

We urge you to read this joint proxy statement/prospectus, and the documents incorporated by reference into this joint proxy statement/prospectus, carefully and in their entirety. In particular, see the section entitled “Risk Factors” beginning on page 19.

 

We are very excited about the opportunities the proposed merger brings to Radian stockholders and we thank you for your consideration and continued support.

 

 

Sanford A. Ibrahim

Chief Executive Officer

Radian Group Inc.

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of the MGIC common stock to be issued under this joint proxy statement/prospectus or determined if this joint proxy statement/prospectus is accurate or adequate. Any representation to the contrary is a criminal offense.

 

The date of this joint proxy statement/prospectus is [          , 2007], and it is first being mailed to Radian stockholders on or about [          , 2007].

 

[RADIAN ALTERNATIVE PAGE]

 

RADIAN GROUP INC.
1601 Market Street
Philadelphia, Pennsylvania 19103

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be Held on May 9, 2007

 

Radian Group Inc. (“Radian”) will hold an annual meeting of Radian stockholders at The Westin Philadelphia, 99 South 17th Street, Philadelphia, Pennsylvania 19103, at 9:00 a.m. local time, on May 9, 2007 to consider and vote upon the following matters:

 

 

Upon completion of the merger, MGIC will be the surviving corporation, and each share of Radian common stock will be converted into 0.9658 shares of MGIC common stock. Your attention is directed to the joint proxy statement/prospectus accompanying this notice for a complete discussion of the merger. A copy of the merger agreement is included as Annex A to the accompanying joint proxy statement/prospectus.

 

The board of directors has fixed the close of business on March 19, 2007 as the record date for the Radian annual meeting. Radian stockholders of record at such time are entitled to notice of, and to vote at, the Radian annual meeting or any adjournment or postponement of the Radian annual meeting.

 

Whether or not you plan to attend the Radian annual meeting, please submit your proxy with voting instructions. To submit your proxy by mail, please complete, sign, date and return the accompanying proxy card in the enclosed self-addressed, stamped envelope. This will not prevent you from voting in person, but it will help to secure a quorum and avoid added solicitation costs. Any holder of Radian common stock who is present at the Radian annual meeting may vote in person instead of by proxy, thereby canceling any previous proxy. Also, a proxy may be revoked in writing at any time before the Radian annual meeting.

 

[RADIAN ALTERNATIVE PAGE]

 

The Radian board of directors has unanimously approved the merger agreement and unanimously recommends that Radian stockholders vote “FOR” adoption of the merger agreement and “FOR” approval of the adjournment of the Radian annual meeting, if necessary or appropriate to solicit additional proxies.

 

By Order of the Board of Directors,

 

 

Teresa A. Bryce
Executive Vice President,
General Counsel and Secretary
Philadelphia, Pennsylvania
[          , 2007]

 

YOUR VOTE IS IMPORTANT

 

Please complete, sign, date and return your proxy card promptly, whether or not you plan to attend the Radian annual meeting.

REFERENCES TO ADDITIONAL INFORMATION

 

This joint proxy statement/prospectus incorporates important business and financial information about MGIC and Radian from documents that are not included in or delivered with this joint proxy statement/prospectus. This information is available for you to review at the Securities and Exchange Commission’s public reference room located at 100 F Street, N.E., Washington, D.C. 20549, and through the Securities and Exchange Commission’s website located at http://www.sec.gov. You can also obtain those documents incorporated by reference into this joint proxy statement/prospectus, without charge, by requesting them in writing or by telephone or email from the appropriate company at the following addresses, telephone numbers and email addresses or obtaining them from each company’s website listed below:

 

 

Information contained on the MGIC and Radian websites is expressly not incorporated by reference into this joint proxy statement/prospectus.

 

You can also obtain documents incorporated by reference into this joint proxy statement/prospectus by requesting them in writing or by telephone from D. F. King & Co., Inc., MGIC’s proxy solicitor, or Georgeson Shareholder Communications, Inc., Radian’s proxy solicitor, at the following addresses and telephone numbers:

 

 

You will not be charged for any of these documents that you request. If you would like to request such documents, you must do so by May 3, 2007, so that you may receive them before the annual meetings.

 

You should rely only on the information contained or incorporated by reference into this joint proxy statement/prospectus to vote on the merger agreement. No one has been authorized to provide you with information that is different from that contained in, or incorporated by reference into, this joint proxy statement/prospectus. This joint proxy statement/prospectus is dated [          , 2007]. You should not assume that the information contained in, or incorporated by reference into, this joint proxy statement/prospectus is accurate as of any date other than that date. Neither our mailing of this joint proxy statement/prospectus to MGIC stockholders or Radian stockholders nor the issuance by MGIC of common stock in connection with the merger will create any implication to the contrary.

 

TABLE OF CONTENTS

 

[MGIC ALTERNATE PAGE]

 

 

[RADIAN ALTERNATE PAGE]

 

Q:		What Am I Being Asked To Vote On?
A:		MGIC stockholders and Radian stockholders are each being asked to adopt a merger agreement entered into between MGIC and Radian. In the merger, Radian will be merged with and into MGIC, MGIC will be the surviving corporation, and Radian’s stockholders will receive MGIC common stock. In addition, stockholders will act on the matters outlined in each of MGIC’s and Radian’s notices of annual meeting on the preceding pages, including the election of directors and ratification of the appointment of independent registered public accounting firms for 2007. Also, management for each of MGIC and Radian will report on the performance during the last year of MGIC and Radian, respectively, and after the meetings respond to questions from stockholders.
Q:		Who Is Entitled To Vote At The Meeting?
A:		For MGIC, only stockholders of record at the close of business on March 9, 2007, the record date for the meeting, are entitled to receive notice and to participate in the annual meeting. For each share of MGIC common stock that you held on that date, you are entitled to one vote on each matter considered at the meeting.
		For Radian, only stockholders of record at the close of business on March 19, 2007, the record date for the meeting, are entitled to receive notice and to participate in the annual meeting. For each share of Radian common stock that you held on that date, you are entitled to one vote on each matter considered at the meeting.
Q:		What Is A Proxy?
A:		A proxy is another person you legally designate to vote your shares. If you designate someone as your proxy in a written document, that document is also called a proxy or a proxy card.
Q:		Why Is My Vote Important?
A:		The affirmative vote of the holders of at least a majority of the outstanding shares of each of MGIC and Radian is required to adopt the merger agreement. Accordingly, if an MGIC stockholder or a Radian stockholder fails to vote or abstains, this will have the same effect as a vote against adoption of the merger agreement.
Q:		What Do I Need To Do Now?
A:		After you have carefully read this joint proxy statement/prospectus, indicate on your proxy card how you want your shares to be voted. Then complete, sign, date and mail your proxy card in the enclosed postage paid return envelope as soon as possible. This will enable your shares to be represented and voted at the MGIC annual meeting or the Radian annual meeting, as applicable.
Q:		If My Shares Are Held In Street Name By My Broker, Will My Broker Automatically Vote My Shares For Me?
A:		No. Without instructions from you, your broker will not be able to vote your shares on the adoption of the merger agreement. You should instruct your broker to vote your shares, following the directions your broker provides. Please check the voting form used by your broker to see if it offers telephone or internet voting.
		If you hold shares of MGIC common stock as a participant in the MGIC Investment Corporation Profit Sharing and Savings Plan and Trust, the trustee for the plan will vote the shares you hold through the plan as you direct. U.S. Bank, N.A. will provide plan participants who hold MGIC common stock through the plan with forms on which participants may communicate their voting instructions. If voting instructions are not received for shares held in the plan, those shares will be voted in the same proportion

		that all shares of MGIC common stock in the plan for which voting instructions have been received are voted.
Q:		What If I Fail To Instruct My Broker?
A:		If you fail to instruct your broker to vote shares held in “street name,” the resulting broker non-vote will have the same effect as a vote against adoption of the merger agreement.
Q:		Can I Change My Vote?
A:		Yes. If you have not voted through your broker, there are three ways you can change your vote after you have submitted your proxy:
		• First, you may send a written notice to the corporate secretary of MGIC or Radian, as appropriate, stating that you would like to revoke your proxy.
		• Second, you may complete and submit a new proxy card. Your latest vote actually received by MGIC or Radian, as the case may be, before the annual meeting will be counted, and any earlier votes will be revoked.
		• Third, you may attend the MGIC or Radian annual meeting, as the case may be, and vote in person. Any earlier proxy will thereby be revoked. However, simply attending the meeting without voting will not revoke an earlier proxy you may have given.
		If you have instructed a broker to vote your shares, or if your shares are held in MGIC’s Profit Sharing and Savings Plan and Trust or the Radian Group Inc. Savings Incentive Plan, you must follow the instructions of the broker, nominee or plan trustee on how to change or revoke your vote.
Q:		If I Am A Radian Stockholder, Should I Send In My Stock Certificates Now?
A:		No. Please do NOT send in your stock certificates at this time. We will provide you with instructions regarding the surrender of your stock certificates at a later date. You should then send your Radian common stock certificates to the exchange agent. There is no need for MGIC stockholders to send in or exchange their existing stock certificates at any time in connection with the merger.
Q:		When Do You Expect To Complete The Merger?
A:		We currently expect to complete the merger in the fourth quarter of 2007. However, we cannot assure you when or if the merger will occur. We must first obtain the approvals of our stockholders at the annual meetings and obtain the necessary regulatory approvals.
Q:		What Are The Boards’ Recommendations?
A:		For MGIC, the board of directors recommends a vote “FOR” adoption of the merger agreement, “FOR” election of each of its director nominees listed in this proxy statement/prospectus, “FOR” ratification of the appointment of PricewaterhouseCoopers LLP as MGIC’s independent registered public accounting firm for 2007, and “FOR” approval of the adjournment of the MGIC annual meeting, if necessary or appropriate, to solicit additional proxies.
		For Radian, the board of directors recommends a vote “FOR” adoption of the merger agreement, “FOR” election of each of its director nominees listed in this proxy statement/prospectus, “FOR” ratification of the appointment of Deloitte & Touche LLP as Radian’s independent registered public accounting firm for 2007, and “FOR” approval of the adjournment of the Radian annual meeting, if necessary or appropriate, to solicit additional proxies.
		If you sign and return a proxy card without specifying how you want your shares voted, the named proxies will vote your shares in accordance with the recommendations of the boards of each of MGIC

		and Radian regarding the matters described in this proxy statement/prospectus, and in their best judgment on any other matters that properly come before the meetings.
Q:		Will Any Other Items Be Acted Upon At The Annual Meeting?
A:		The respective boards of MGIC and Radian know of no other business to be presented at their annual meetings. Neither MGIC nor Radian received any proposals from stockholders for presentation at their respective annual meetings that will be brought before such meetings.
Q:		What Are The Deadlines For Submission Of Stockholder Proposals For The Next Annual Meeting?
A:		Stockholders may submit proposals on matters appropriate for stockholder action at future annual meetings by following the rules of the Securities and Exchange Commission. For a proposal to be included in next year’s MGIC proxy materials, the Corporate Secretary of MGIC must receive the proposal no later than [          , 2007].  For a proposal to be included in next year’s Radian proxy materials, the Secretary of Radian must receive the proposal no later than [          , 2007].
		Under MGIC’s amended and restated bylaws, a stockholder who wants to bring business before the annual meeting that has not been included in the proxy materials for the meeting, or who wants to nominate directors at the meeting, must be eligible to vote at the meeting and give written notice of the proposal to MGIC’s Corporate Secretary. The procedures contained in MGIC’s amended and restated bylaws include giving notice to the MGIC corporate secretary at least 45 and not more than 70 days prior to the first anniversary date of the annual meeting for the preceding year. For the 2008 annual meeting, the notice must be received by the MGIC Corporate Secretary by no later than February   , 2008, and no earlier than January   , 2008. For director nominations, the notice must comply with the MGIC amended and restated bylaws and provide the information required to be included in the proxy statement for individuals nominated by the board. For any other proposals, the notice must describe the proposal and why it should be approved, identify any material interest of the stockholder in the matter, and include other information required by the MGIC amended and restated bylaws.
		Under Radian’s bylaws, a stockholder who desires to submit a proposal for consideration at the 2008 annual meeting, but not have the proposal included with the proxy solicitation materials relating to the 2008 annual meeting, or who wants to nominate directors for election to Radian’s board of directors, must submit written notice to Radian’s Secretary. The written notice must be received by Radian’s Secretary at least 60 days before the 2008 annual meeting (except that if Radian gives less than 75 days’ notice or other public disclosure of the 2008 annual meeting, then the proposal must be received by Radian’s Secretary no later than the close of business on the 15th day after the day on which Radian mails the notice of the 2008 annual meeting or makes such public disclosure). For director nominations, the notice must contain: the name, age, principal occupation, and business and residence address of each person nominated; the class and number of shares of Radian capital stock beneficially owned by each person nominated; any other information about each person nominated that would be required under relevant SEC rules to be in a proxy statement for a meeting involving the election of directors; the name and record address of the stockholder making the nomination; and the class and number of shares of Radian capital stock owned by the stockholder making the nomination. The full text of the relevant bylaw provisions may be obtained upon written request directed to Radian’s Secretary and a copy of Radian’s bylaws is available on the corporate governance section of Radian’s website, www.radian.biz.

Q:		Whom Should I Call With Questions?
A:		If you have questions about the merger, the annual meetings or how to vote your shares, or you need additional copies of this joint proxy statement/prospectus or the enclosed proxy card or voting instruction card, you should contact:

If you are an MGIC stockholder:		If you are a Radian stockholder:
D. F. King & Co., Inc.		Georgeson Shareholder Communications, Inc.
48 Wall Street		17 State Street, Tenth Floor
New York, New York 10005		New York, New York 10004
Toll-Free (800) 967-7635		Toll-Free (866) 541-3223

	•	adoption of the merger agreement by the stockholders of both companies;
	•	receipt of governmental and regulatory approvals required to complete the merger;
	•	there being no injunction, decree or order enjoining or prohibiting the merger;
	•	authorization for listing of the MGIC common stock to be issued in the merger on the New York Stock Exchange;
	•	the registration statement of which this document is a part must be declared effective by the Securities and Exchange Commission (“SEC”) and not be subject to a stop order or proceedings seeking a stop order;
	•	the receipt by each party of a written legal opinion, dated as of the completion of the merger, to the effect that the merger will constitute a reorganization within the meaning of Section 368(a) of the Internal Revenue Code;
	•	the accuracy of each party’s representations and warranties, subject to the material adverse effect standard in the merger agreement;
	•	each party having performed and complied with its covenants in the merger agreement in all material respects; and
	•	in the case of Radian’s obligation to complete the merger, MGIC’s amended and restated bylaws must have been amended to provide for, and MGIC’s board of directors must adopt resolutions to approve, the agreed-upon structure of the board of directors and Chief Executive Officer and Chairman of the Board succession arrangements following the completion of the merger.

	•	any governmental entity that must grant a material required regulatory approval has denied approval of the merger and such denial has become final and nonappealable or any governmental entity has issued a final nonappealable order permanently enjoining or otherwise prohibiting the completion of the merger;
	•	the merger is not completed on or before February 6, 2008, unless the failure to complete the merger by that date is due to the terminating party’s failure to abide by the merger agreement;
	•	there is a breach by the other party that would cause the failure of the closing conditions described above, unless the breach is capable of being, and is, cured within 45 days of notice of the breach;
	•	the stockholders of either party fail to adopt the merger agreement;
	•	the board of directors of the other party fails to recommend that its stockholders vote in favor of approving the merger agreement or withdraws, modifies or qualifies its recommendation in a manner adverse to the terminating party;
	•	the board of directors of the other party recommends or endorses an acquisition proposal other than the merger agreement; or
	•	the other party substantially fails to comply with its obligation to call a meeting of its stockholders and use its reasonable best efforts to cause its stockholders to adopt the merger agreement or breaches its non-solicitation covenant.

	•	to adopt the merger agreement;
	•	to elect three directors, each for a three-year term;

	•	to ratify the appointment of PricewaterhouseCoopers LLP as MGIC’s independent registered public accounting firm for 2007;
	•	to approve the adjournment of the MGIC annual meeting, if necessary or appropriate, to solicit additional proxies; and
	•	to act on such other business as may properly come before the MGIC annual meeting.

	•	to adopt the merger agreement;
	•	to elect ten directors, each for a one-year term;
	•	to ratify the appointment of Deloitte & Touche LLP as Radian’s independent registered public accounting firm for 2007;
	•	to approve the adjournment of the Radian annual meeting, if necessary or appropriate, to solicit additional proxies; and
	•	to act on such other business as may be properly brought before the Radian annual meeting.

		MGIC				Radian
		Common				Common
		Stock				Stock
February 5, 2007		$	62.93			$	60.84
[          , 2007]		$	[_.__]			$	[_.__]

		Year Ended December 31,
		2006				2005				2004				2003				2002
		(In thousands of dollars, except per share data and where indicated)
Summary of Operations
Revenues:
Net premiums written		$	1,217,236			$	1,252,310			$	1,305,417			$	1,364,631			$	1,177,955
Net premiums earned			1,187,409				1,238,692				1,329,428				1,366,011				1,182,098
Investment income, net			240,621				228,854				215,053				202,881				207,516
Realized investment (losses) gains, net			(4,264	)			14,857				17,242				36,862				29,113
Other revenue			45,403				44,127				50,970				79,657				65,836
Total revenues			1,469,169				1,526,530				1,612,693				1,685,411				1,484,563
Losses and expenses:
Losses incurred, net			613,635				553,530				700,999				766,028				365,752
Underwriting and other expenses			290,858				275,416				278,786				302,473				265,633
Interest expense			39,348				41,091				41,131				41,113				36,776
Total losses and expenses			943,841				870,037				1,020,916				1,109,614				668,161
Income before tax and joint ventures			525,328				656,493				591,777				575,797				816,402
Provision for income tax			130,097				176,932				159,348				146,027				240,971
Income from joint ventures, net of tax			169,508				147,312				120,757				64,109				53,760
Net income			564,739				626,873				553,186				493,879				629,191
Weighted average common shares outstanding (in thousands)			84,950				92,443				98,245				99,022				104,214
Diluted earnings per share		$	6.65			$	6.78			$	5.63			$	4.99			$	6.04
Dividends per share		$	1.00			$	.525			$	.2250			$	.1125			$	.10

		Year Ended December 31,
		2006				2005				2004				2003				2002
		(In thousands of dollars, except per share data and where indicated)
Balance Sheet Data (at end of period):
Total investments		$	5,252,422			$	5,295,430			$	5,418,988			$	5,067,427			$	4,624,256
Total assets			6,621,671				6,357,569				6,380,691				5,917,387				5,300,303
Loss reserves			1,125,715				1,124,454				1,185,594				1,061,788				733,181
Short- and long-term debt			781,277				685,163				639,303				599,680				677,246
Shareholders’ equity			4,295,877				4,165,055				4,143,639				3,796,902				3,395,192
Book value per share			51.88				47.31				43.05				38.58				33.87
New primary insurance written ($ millions)			58,242				61,503				62,902				96,803				92,532
New primary risk written ($ millions)			15,937				16,836				16,792				25,209				23,403
New pool risk written ($ millions)(1)			240				358				208				862				674
Insurance in force (at year-end) ($ millions):
Direct primary insurance			176,531				170,029				177,091				189,632				196,988
Direct primary risk			47,079				44,860				45,981				48,658				49,231
Direct pool risk(1)			3,063				2,909				3,022				2,895				2,568
Primary loans in default ratios:
Policies in force			1,283,174				1,303,084				1,413,678				1,551,331				1,655,887
Loans in default			78,628				85,788				85,487				86,372				73,648
Percentage of loans in default			6.13	%			6.58	%			6.05	%			5.57	%			4.45	%
Percentage of loans in default — bulk			14.87	%			14.72	%			14.06	%			11.80	%			10.09	%
Insurance operating ratios (GAAP)(2):
Loss ratio			51.7	%			44.7	%			52.7	%			56.1	%			30.9	%
Expense ratio			17.0	%			15.9	%			14.6	%			14.1	%			14.8	%
Combined ratio			68.7	%			60.6	%			67.3	%			70.2	%			45.7	%
Risk-to-capital ratio (statutory)(3):
Mortgage Guaranty Insurance Corporation			6.4:1				6.3:1				6.8:1				8.1:1				8.7:1

(1)		Represents contractual aggregate loss limits and, for the years ended December 31, 2006, 2005, 2004, 2003 and 2002, for $4.4 billion, $5.0 billion, $4.9 billion, $4.9 billion and $3.0 billion, respectively, of risk without such limits, risk is calculated at $4 million, $51 million, $65 million, $192 million and $147 million, respectively, for new risk written and $473 million, $469 million, $418 million, $353 million and $161 million, respectively, for risk in force, the estimated amount that would credit enhance these loans to a ‘AA’ level based on a rating agency model.
(2)		The loss ratio (expressed as a percentage) is the ratio of the sum of incurred losses and loss adjustment expenses to net premiums earned. The expense ratio (expressed as a percentage) is the ratio of the combined insurance operations underwriting expenses to net premiums written.
(3)		Mortgage Guaranty Insurance Corporation prepares its financial statements in accordance with accounting practices prescribed or permitted by the Wisconsin Insurance Department, which differ in certain respects from accounting principles generally accepted in the United States.

		2006				2005				2004				2003				2002
		(In millions, except per-share amounts and ratios)
Condensed Consolidated Statements of Income
Net premiums written		$	1,112.0			$	1,100.7			$	1,082.5			$	1,110.5			$	954.9
Net premiums earned		$	1,015.8			$	1,018.7			$	1,029.5			$	1,008.2			$	847.1
Net investment income			234.3				208.4				204.3				186.2				178.8
Net gains on securities			40.8				36.6				50.8				17.4				10.5
Change in fair value of derivative instruments			16.1				9.2				47.1				4.1				(13.0	)
Other income			20.9				25.2				32.3				63.3				44.4
Total revenues			1,327.9				1,298.1				1,364.0				1,279.2				1,067.8
Provision for losses			369.3				390.6				456.8				476.1				243.4
Policy acquisition costs			111.6				115.9				121.8				128.5				100.8
Other operating expenses			242.6				226.0				205.7				211.1				175.3
Interest expense			48.1				43.0				34.7				37.5				28.8
Equity in net income of affiliates			257.0				217.7				180.6				105.5				81.8
Pretax income			813.3				740.3				725.6				531.5				601.3
Net income			582.2				522.9				518.7				385.9				427.2
Diluted net income per share(1)		$	7.08			$	5.91			$	5.33			$	3.95			$	4.27
Cash dividends declared per share		$	.08			$	.08			$	.08			$	.08			$	.08
Average shares outstanding-diluted			82.3				88.7				97.9				98.5				99.5
Condensed Consolidated Balance Sheets
Total assets		$	7,928.7			$	7,230.6			$	7,000.8			$	6,445.8			$	5,393.4
Total investments			5,745.3				5,513.7				5,470.1				5,007.4				4,200.3
Unearned premiums			943.7				849.4				770.2				718.6				618.1
Reserve for losses and loss adjustment expenses			842.3				801.0				801.0				790.4				624.6
Short-term and long-term debt			747.8				747.5				717.6				717.4				544.1
Stockholders’ equity			4,067.6				3,662.9				3,689.1				3,225.8				2,753.4
Book value per share		$	51.23			$	44.11			$	39.98			$	34.31			$	29.42
Selected Ratios — Mortgage Insurance(2)
Loss ratio			42.9	%			44.5	%			49.2	%			40.7	%			29.4	%
Expense ratio			29.2				26.7				26.6				25.8				26.6
Combined ratio			72.1	%			71.2	%			75.8	%			66.5	%			56.0	%

		2006				2005				2004				2003				2002
		(In millions, except per-share amounts and ratios)
Selected Ratios — Financial Guaranty(2)
Loss ratio			10.1	%			14.9	%			26.0	%			67.1	%			26.2	%
Expense ratio			52.2				55.7				45.9				38.8				33.0
Combined ratio			62.3	%			70.6	%			71.9	%			105.9	%			59.2	%
Other Data — Mortgage Insurance
Primary new insurance written		$	40,117			$	42,592			$	44,820			$	68,362			$	48,767
Direct primary insurance in force			113,903				109,684				115,315				119,887				110,273
Direct primary risk in force			25,311				25,729				27,012				27,106				26,273
Total pool risk in force			2,991				2,711				2,384				2,415				1,732
Total other risk in force(3)			10,322				9,709				1,205				1,053				475
Persistency (twelve months ended)			67.3	%			58.2	%			58.8	%			46.7	%			57.0	%
Other Data — Financial Guaranty(4):
Net premiums written		$	263			$	223			$	216			$	369			$	286
Net premiums earned			204				212				214				249				187
Net par outstanding			103,966				76,652				66,720				76,997				66,337
Net debt service outstanding			143,728				110,344				101,620				117,900				104,756

(1)		Diluted net income per share and average share information in accordance with Statement of Financial Accounting Standards No. 128, “Earnings Per Share.” Amounts reflect the inclusion of shares underlying contingently convertible debt, which was redeemed on August 1, 2005. See Note 2 of Notes to Radian’s Consolidated Financial Statements, incorporated by reference herein.
(2)		Calculated on a GAAP basis using provision for losses to calculate the loss ratio and policy acquisition costs and other operating expenses to calculate the expense ratio as a percentage of net premiums earned.
(3)		Consists mostly of international insurance risk, second-lien mortgage insurance risk and other structured mortgage-related insurance risk.
(4)		Reflects the 2004 and 2005 recaptures of previously ceded business. See Note 2 of Notes to Radian’s Consolidated Financial Statements, incorporated by reference herein.

		Unaudited Pro Forma Combined
		(In millions, except per share data)
For the year ended December 31, 2006
Total revenues		$	2,797
Income from continuing operations			1,040
Earnings per common share — continuing operations:
Basic		$	6.39
Diluted		$	6.33
At December 31, 2006
Total investments		$	11,000
Total assets			15,051
Loss reserves			1,968
Debt			1,542
Total liabilities			5,587
Shareholders’ equity			9,464

		At and for the Year Ended December 31, 2006
														Radian
										Unaudited				Unaudited
		Historical				Historical				Pro Forma				Pro Forma
		MGIC				Radian				Combined				Equivalent
		(In millions, except per share data)
Basic Earnings per Common Share from Continuing Operations
Income from continuing operations		$	565			$	582			$	1,040			$	582
Income from continuing operations available to common shareholders		$	565			$	582			$	1,040			$	582
Weighted average basic common shares outstanding			84.3				81.3				162.8				78.5	(1)
Basic earning per common share		$	6.70			$	7.16			$	6.39			$	7.41
Diluted Earnings per Common Share from Continuing Operations
Income from continuing operations		$	565			$	582			$	1,040			$	582
Income from continuing operations available to common shareholders		$	565			$	582			$	1,040			$	582
Weighted average diluted common shares outstanding			84.9				82.3				164.4				79.5	(1)
Diluted earning per common share		$	6.65			$	7.08			$	6.33			$	7.32
Dividends per Common Share(2)
Common stock dividends		$	85			$	7			$	163			$	7
Dividends per common share		$	1.00			$	0.08			$	1.00			$	0.08	(1)
Book Value per Common Share
Total common shareholders’ equity		$	4,296			$	4,068			$	9,464			$	4,068
Common shares outstanding at period-end			82.8				79.4				159.5				76.7	(1)
Book value per common share		$	51.88			$	51.23			$	59.34			$	53.05

(1)		Amounts are based on Radian historical share amounts adjusted by the exchange ratio in the merger (0.9658 of a share of MGIC common stock).
(2)		The annual dividend of the combined company is expected to remain at the current annual MGIC dividend of $1.00 per share.

 

In addition to the other information contained in or incorporated by reference into this joint proxy statement/prospectus, you should carefully consider the following risk factors relating to the merger and the business of the combined company in deciding whether to vote for adoption of the proposals described in this joint proxy statement/prospectus.

 

Because the market price of MGIC common stock may fluctuate, you cannot be sure of the market value of the MGIC common stock that MGIC will issue or that Radian stockholders will receive in the merger.

 

Upon completion of the merger, each share of Radian common stock that Radian stockholders hold immediately prior to the merger will be converted into 0.9658 shares of common stock of MGIC. This exchange ratio will not be adjusted for changes in the market price of either MGIC common stock or Radian common stock. Changes in the price of MGIC common stock prior to the merger will affect the value that Radian stockholders will receive on the date of the merger and that MGIC will pay. Stock price changes may result from a variety of factors, including general market and economic conditions, changes in our businesses, operations and prospects and regulatory considerations, many of which factors are beyond our control. Neither of us is permitted to terminate the merger agreement or resolicit the vote of our stockholders solely because of changes in the market price of either of our common stock.

 

The prices of MGIC common stock and Radian common stock at the closing of the merger may vary from their respective prices on the date the merger agreement was executed, on the date of this joint proxy statement/prospectus and on the date of the MGIC and Radian annual meetings of stockholders. As a result, the value represented by the exchange ratio will also vary. For example, based on the range of closing prices of MGIC common stock during the period from February 5, 2007, the last full trading day before public announcement of the merger, through [          , 2007], the exchange ratio represented a value ranging from a high of [$  .  ] to a low of [$  .  ] for each share of Radian common stock. Because the date that the merger is completed will be later than the date of the MGIC and Radian annual meetings of stockholders, at the time of your meeting, you will not know the market value of the MGIC common stock that Radian stockholders will receive upon completion of the merger.

 

We must obtain several governmental consents to complete the merger, which, if delayed, not granted or granted with unacceptable conditions may jeopardize or delay the merger, result in additional expense or reduce the anticipated benefits of the transaction.

 

We must obtain specified approvals and consents in a timely manner from federal and state governmental authorities prior to the completion of the merger. If we do not receive these approvals on terms that satisfy the merger agreement, then we will not be obligated to complete the merger. The governmental authorities from which we seek approvals have broad discretion in administering relevant laws and regulations. As a condition to the approval of the merger, governmental authorities may impose requirements, limitations or costs that could negatively affect the way the combined company conducts business. If MGIC and Radian agree to any material conditions or restrictions to obtain any approvals required to complete the merger, these conditions or restrictions could adversely affect the integration of the businesses of MGIC and Radian or could reduce the anticipated benefits of the merger.

 

If we fail to realize the anticipated cost savings and other benefits of the merger or fail to sell partial interests in two joint ventures for the amount anticipated, the merger could be dilutive to the combined company’s earnings per share or otherwise adverse to our stockholders.

 

The success of the merger will depend, in part, on our ability to realize the anticipated cost savings from combining the businesses of MGIC and Radian. Our managements have estimated that approximately $128 million of annual pre-tax cost savings would be realized from the merger. However, to realize the anticipated benefits from the merger, we must successfully combine the businesses of MGIC and Radian in a manner that permits those cost savings to be realized. If we are not able to successfully achieve these

objectives, the anticipated benefits of the merger may not be realized fully or at all or may take longer to realize than expected. Such a failure could result in a decrease in the combined company’s earnings per share. In addition, we anticipate that initially the revenues of the combined company following the merger will be lower than the combined revenues of MGIC and Radian prior to the merger. If the decline in revenue is greater than anticipated, the combined company’s earnings per share could be negatively affected.

 

At the completion of the merger, in connection with our efforts to maintain strong financial strength ratings, we plan to sell a portion of the combined company’s interest in each of Credit-Based Asset Servicing and Securitization LLC and Sherman Financial Group LLC and use the proceeds to repurchase stock of the combined company. The sales of these interests may result in lower than anticipated proceeds. If the proceeds are substantially lower than we anticipate, the amount of the combined company’s stock that we repurchase could be affected. A reduction in the amount of stock repurchased could lower the combined company’s earnings per share.

 

MGIC and Radian have operated and, until the completion of the merger, will continue to operate, independently. It is possible that the integration process could result in the loss of key employees, the disruption of each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies, any of which could adversely affect our ability to maintain relationships with clients and employees or our ability to achieve the anticipated benefits of the merger or could reduce our earnings.

 

The market price of the combined company’s shares after the merger may be affected by factors different from those affecting the shares of MGIC or Radian currently.

 

The businesses of MGIC and Radian differ in some respects and, accordingly, the results of operations of the combined company and the market price of the combined company’s shares of common stock may be affected by factors different from those currently affecting the independent results of operations of each of MGIC or Radian. For a discussion of the businesses of MGIC and Radian and of factors to consider in connection with those businesses, see the documents we incorporate by reference into this joint proxy statement/prospectus and refer to under “Where You Can Find More Information.”

 

Some directors and executive officers of MGIC and Radian have interests and arrangements with respect to the merger that are different from, or in addition to, those of MGIC and Radian stockholders.

 

When considering the recommendation of the MGIC and Radian boards of directors with respect to the merger, you should be aware that some directors and executive officers of MGIC and Radian have interests in the merger that are different from, or in addition to, their interests as stockholders and the interests of stockholders generally. These interests include:

 

 

As a result of these interests, these directors and executive officers may be more likely to support and to vote to approve the merger agreement than if they did not have these interests. Stockholders should consider whether these interests may have influenced those directors and executive officers to support or recommend approval of the merger. As of the close of business on the record date for the MGIC annual meeting, MGIC directors and executive officers and their affiliates were entitled to vote approximately 1.15% of the then-outstanding shares of MGIC common stock. See “Merger Proposal to be Considered at the Annual Meetings of MGIC and Radian — Interests of MGIC Directors and Officers in the Merger.” As of the close of business on the record date for the Radian annual meeting, Radian directors and executive officers were entitled to vote approximately [  %] of the then-outstanding shares of Radian common stock. See “Merger Proposal to be Considered at the Annual Meetings of MGIC and Radian — Interests of Radian Directors and Officers in the Merger.”

 

The combined company may have difficulty integrating MGIC and Radian and may incur substantial costs in connection with the integration.

 

The combined company may experience material unanticipated difficulties or expenses in connection with integrating MGIC and Radian, especially given the relatively large size of the merger. Integrating MGIC and Radian will be a complex, time-consuming and expensive process. Before the merger, MGIC and Radian operated independently, each with its own business, products, customers, employees, culture and systems.

 

The resulting company may face substantial difficulties, costs and delays in integrating MGIC and Radian. These factors may include:

 

 

After the merger, we may seek to combine certain operations and functions using common information and communication systems, operating procedures, financial controls and human resource practices, including training, professional development and benefit programs. We may be unsuccessful or delayed in implementing the integration of these systems and processes.

 

Any one or all of these factors may cause increased operating costs, worse than anticipated financial performance or the loss of clients, employees and agents. Many of these factors are outside the control of either company.

 

The merger agreement limits MGIC’s and Radian’s ability to pursue an alternative acquisition proposal and requires MGIC or Radian to pay a termination fee of $185 million under limited circumstances relating to alternative acquisition proposals.

 

The merger agreement prohibits MGIC and Radian from initiating, soliciting, encouraging or facilitating certain alternative acquisition proposals with any third party, subject to exceptions set forth in the merger agreement. See “The Merger Agreement — No Solicitation.” The merger agreement also provides for the payment by MGIC or Radian of a termination fee of $185 million if the merger agreement is terminated in certain circumstances in connection with a third party completing an alternative acquisition or executing an agreement regarding an alternative transaction. See “Merger Agreement — Termination.”

 

These provisions limit MGIC’s and Radian’s ability to pursue offers from third parties that could result in greater value to MGIC’s or Radian’s stockholders. The obligation to pay the termination fee also may discourage a third party from pursuing an alternative acquisition proposal.

 

The merger is subject to certain closing conditions that, if not satisfied or waived, will result in the merger not being completed, which may cause the market price of MGIC common stock or Radian common stock to decline.

 

The merger is subject to customary conditions to closing, including the receipt of required regulatory approvals and approvals of the MGIC and Radian stockholders. If any condition to the merger is not satisfied or waived, to the extent permitted by law or New York Stock Exchange rule, the merger will not be completed. In addition, MGIC and Radian may terminate the merger agreement under certain circumstances. If MGIC and Radian do not complete the merger, the market price of MGIC common stock or Radian common stock may decline to the extent that the current market prices of those shares reflect a market assumption that the merger will be completed. Further, whether or not the merger is completed, MGIC and Radian will also be obligated to pay certain investment banking, financing, legal and accounting fees and related expenses in connection with the merger, which could negatively impact results of operations when incurred. In addition, neither company would realize any of the expected benefits of having completed the merger. If the merger is not completed, MGIC and Radian cannot be certain that additional risks will not materialize or not materially adversely affect the business, financial results, financial condition and stock prices of MGIC or Radian. For more information on closing conditions to the merger agreement, see the section entitled “Merger Agreement — Conditions to Completion of the Merger.”

 

Upon completion of the merger, certain of Radian’s financial guaranty reinsurance customers will have the right to recapture reinsurance business previously assumed by Radian.

 

Upon completion of the merger, certain of Radian’s financial guaranty reinsurance customers will have the right to recapture reinsurance business previously assumed by Radian. At December 31, 2006, Radian had assumed approximately $10 billion of par in force and approximately $70 million of unearned premium reserves (a small portion of which is not subject to recapture) from these customers. If all this reinsurance business were recaptured, we estimate that the combined company would have to disburse approximately $55 million in cash to settle the recaptures. We cannot be certain whether any of these customers will recapture all or any portion of this business upon completion of the merger or of the exact impact of any recapture.

 

This joint proxy statement/prospectus contains or incorporates by reference a number of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding MGIC and Radian and may include statements about the period following the completion of the merger. You can find many of these statements by looking for words such as “plan,” “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “potential” or other similar expressions. Such statements include, but are not limited to, statements about the benefits of the merger, including future financial and operating results, and MGIC’s and Radian’s plans, objectives, expectations and intentions. Such statements involve risks and uncertainties that may cause results to differ materially from those set forth in these statements.

 

The ability of MGIC and Radian to predict results or the actual effects of its plans and strategies is inherently uncertain and the merger itself creates additional uncertainty. Accordingly, actual results may differ materially from anticipated results. The factors described in “Risk Factors” and the following factors, among others, could cause actual results to differ materially from those set forth in the forward-looking statements:

 

 

Because such forward-looking statements are subject to assumptions and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. MGIC stockholders and Radian stockholders are cautioned not to place undue reliance on such statements, which speak only as of the date of this joint proxy statement/prospectus or the date of any document incorporated by reference. Neither MGIC nor Radian undertakes any obligation to update such forward-looking statements to reflect events or circumstances after the date of this joint proxy statement/prospectus or to reflect the occurrence of unanticipated events.

 

All subsequent written and oral forward-looking statements concerning the merger or other matters addressed in this joint proxy statement/prospectus and attributable to MGIC, Radian or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.

 

The MGIC annual meeting will be held on May 10, 2007, at 9:00 a.m. local time at the Marcus Center for the Performing Arts, 929 North Water Street, Milwaukee, Wisconsin.

 

At the MGIC annual meeting, MGIC stockholders will be asked to:

 

 

The MGIC board of directors recommends that MGIC stockholders vote “FOR” the proposal to adopt the merger agreement. For the reasons for this recommendation, see “Merger Proposal to be Considered at the Annual Meetings of MGIC and Radian — MGIC’s Reasons for the Merger; Recommendation of MGIC’s Board of Directors.” The MGIC board of directors also recommends that you vote “FOR” each of the director nominees listed under the section entitled “Other Matters to be Considered at the MGIC Annual Meeting — Proposal for the Election of Three Directors,” “FOR” the ratification of the selection of PricewaterhouseCoopers LLP as MGIC’s independent registered public accounting firm for fiscal 2007, and “FOR” the approval of the adjournment of the MGIC annual meeting, if necessary or appropriate, to solicit additional proxies.

 

You should complete and return the proxy card accompanying this document to ensure that your vote is counted at the MGIC annual meeting, regardless of whether you plan to attend the MGIC annual meeting. If your shares are held in nominee or “street name” you will receive separate voting instructions from your broker or nominee with your proxy materials. Although most brokers and nominees offer telephone and internet voting, availability and specific processes will depend on their voting arrangements. If your shares are not held in street name, you can revoke the proxy at any time before the vote is taken at the MGIC annual meeting by submitting to MGIC’s corporate secretary written notice of revocation or a properly executed proxy of a later date, or by attending the MGIC annual meeting and voting in person. Written notices of revocation and other communications about revoking MGIC proxies should be addressed to:

 

MGIC Investment Corporation
250 East Kilbourn Avenue
Milwaukee, Wisconsin 53202
Attention: Jeffrey H. Lane
Senior Vice President, Secretary and General Counsel

 

If your shares are held in street name, you should follow the instructions of your broker regarding the revocation of proxies.

 

All shares represented by valid proxies that we receive through this solicitation, and that are not revoked, will be voted in accordance with the instructions on the proxy card. If you make no specification on your proxy card as to how you want your shares voted before signing and returning it, your proxy will be voted “FOR” the adoption of the merger agreement, “FOR” each of the director nominees described herein, “FOR”

the ratification of the selection of PricewaterhouseCoopers LLP as MGIC’s independent registered public accounting firm for 2007, and “FOR” the approval of the adjournment of the MGIC annual meeting, if necessary or appropriate, to solicit additional proxies. The MGIC board of directors is currently unaware of any other matters that may be presented for action at the MGIC annual meeting. If other matters properly come before the MGIC annual meeting, or at any adjournment or postponement thereof, we intend that shares represented by properly submitted proxies will be voted, or not voted, by and at the discretion of the persons named as proxies on the proxy card.

 

We will bear the entire cost of soliciting proxies from you. In addition to solicitation of proxies by mail, we will request that banks, brokers and other record holders send proxies and proxy material to the beneficial owners of MGIC common stock and secure their voting instructions, if necessary. We will reimburse the record holders for their reasonable expenses in taking those actions. We have also made arrangements with D.F. King & Co., Inc. to assist us in soliciting proxies and have agreed to pay them $12,500 plus reasonable expenses for these services. If necessary, MGIC may also use several of its regular employees, who will not be specially compensated, to solicit proxies from MGIC stockholders, either personally or by telephone, email, facsimile or letter.

 

The MGIC board of directors has fixed the close of business on March 9, 2007 as the record date for determining the MGIC stockholders entitled to receive notice of and to vote at the MGIC annual meeting. At that time, 83,067,137 shares of MGIC common stock were outstanding, held by approximately 151 holders of record. As of the record date, directors and executive officers of MGIC and their affiliates had the right to vote 959,269 shares of MGIC common stock, representing approximately 1.15% of the shares entitled to vote at the MGIC annual meeting. MGIC currently expects that its directors and executive officers will vote such shares “FOR” all matters scheduled to be presented for a vote at the MGIC annual meeting.

 

The presence, in person or by properly executed proxy, of the holders of a majority of the outstanding shares of MGIC common stock is necessary to constitute a quorum at the annual meeting. Abstentions and broker non-votes will be counted for the purpose of determining whether a quorum is present.

 

Adoption of the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of MGIC common stock entitled to vote at the MGIC annual meeting. Approval of the proposal relating to the adjournment of the MGIC annual meeting, if necessary or appropriate, to solicit additional proxies requires that the votes cast in favor of the proposal exceed the votes cast in opposition. You are entitled to one vote for each share of MGIC common stock you held as of the record date.

 

Because the affirmative vote of the holders of a majority of the outstanding shares of MGIC common stock entitled to vote at the MGIC annual meeting is required to adopt the merger agreement, the failure to vote by proxy or in person will have the same effect as a vote against the merger agreement. Abstentions and broker non-votes also will have the same effect as a vote against the merger agreement. Accordingly, the MGIC board of directors urges MGIC stockholders to complete, date and sign the accompanying proxy card and return it promptly in the enclosed postage-paid envelope.

 

Abstentions, failures to vote, votes withheld and broker non-votes will have no effect on the vote to adjourn the annual meeting, if necessary or appropriate, to solicit additional proxies.

 

Holders of MGIC common stock will not have any appraisal rights under the Wisconsin Business Corporation Law or under MGIC’s articles of incorporation in connection with the merger, and MGIC will not independently provide holders of MGIC common stock with any such rights.

 

If you are a participant in MGIC’s Profit Sharing and Savings Plan and Trust, please note that the enclosed proxy card also constitutes the voting instruction form for shares allocated to you under such plan and covers all shares you are entitled to vote under the plan, in addition to shares you may hold directly. Signing and returning the proxy card will enable voting of all shares, including those held in such plan.

 

Voting by Telephone or the Internet

 

Many stockholders of MGIC whose shares are registered in the name of a brokerage firm, bank or other nominee have the option to submit their voting instructions electronically by telephone or the internet. Such MGIC stockholders should check the voting instructions forwarded by their broker, bank or other holder of record to see which options are available. MGIC stockholders of record may not vote by telephone or the internet.

 

The Radian annual meeting will be held on May 9, 2007 at 9:00 a.m. local time at The Westin Philadelphia, 99 South 17th Street, Philadelphia, Pennsylvania 19103.

 

At the Radian annual meeting, the Radian stockholders will be asked to:

 

 

The Radian board of directors recommends that Radian stockholders vote “FOR” each of these proposals.

 

You should complete and return the proxy card accompanying this document to ensure that your vote is counted at the Radian annual meeting, regardless of whether you plan to attend the Radian annual meeting. If your shares are held in nominee or “street name” you will receive separate voting instructions from your broker or nominee with your proxy materials. Although most brokers and nominees offer telephone and internet voting, availability and specific processes will depend on their voting arrangements. If your shares are not held in street name, you can revoke the proxy at any time before the vote is taken at the Radian annual meeting by submitting to Radian’s Secretary written notice of revocation or a properly executed proxy of a later date, or by attending the Radian annual meeting and voting in person. Attendance at the meeting, by itself, will not constitute revocation of a proxy. Written notices of revocation and other communications about revoking Radian proxies should be addressed to:

 

Radian Group Inc.
1601 Market Street
Philadelphia, Pennsylvania 19103
Attention: Teresa A. Bryce
Executive Vice President,
General Counsel and Secretary

 

If your shares are held in street name, you should follow the instructions of your broker regarding the revocation of proxies.

 

All shares represented by valid proxies that we receive through this solicitation, and that are not revoked, will be voted in accordance with the instructions on the proxy card. If you make no specification on your proxy card as to how you want your shares voted before signing and returning it, your proxy will be voted “FOR” the adoption of the merger agreement, “FOR” each of the director nominees described herein (and, if unforeseen circumstances make it necessary for our board of directors to substitute another person for any of the nominees, your shares will be voted for that other person), “FOR” the ratification of the selection of Deloitte & Touche LLP as Radian’s independent registered public accounting firm for 2007, and “FOR” the proposal to adjourn the annual meeting, if necessary or appropriate, to solicit additional proxies. The Radian board of directors is currently unaware of any other matters that may be presented for action at the Radian

annual meeting. If other matters properly come before the Radian annual meeting, or at any adjournment or postponement thereof, we intend that shares represented by properly submitted proxies will be voted, or not voted, by and at the discretion of the persons named as proxies on the proxy card.

 

Radian stockholders should not send stock certificates with their proxy cards. If the merger is completed, Radian stockholders will need to exchange their current stock certificates for MGIC stock certificates. Upon completion of the merger, former Radian stockholders will be mailed a transmittal form with instructions on how to exchange their Radian stock certificates for MGIC stock certificates.

 

We will bear the entire cost of soliciting proxies from you. In addition to solicitation of proxies by mail, we will request that banks, brokers and other record holders send proxies and proxy material to the beneficial owners of Radian common stock and secure their voting instructions, if necessary. We will reimburse the record holders for their reasonable expenses in taking those actions. We have also made arrangements with Georgeson Shareholder Communications, Inc. to assist us in soliciting proxies and have agreed to pay them a fee not expected to exceed [          ] plus reasonable expenses for these services. If necessary, we may use several of our regular employees or directors, who will not be specially compensated, but who will be entitled to reimbursement for actual expenses incurred in connection with the solicitation, to solicit proxies from Radian stockholders, either personally or by telephone, email, facsimile or letter.

 

The Radian board of directors has fixed the close of business on March 19, 2007 as the record date for determining the Radian stockholders entitled to receive notice of and to vote at the Radian annual meeting. At that time, [          ] shares of Radian common stock were outstanding, held by approximately [          ] holders of record. As of the record date, directors and executive officers of Radian and their affiliates had the right to vote [          ] shares of Radian common stock, representing approximately [  %] of the shares entitled to vote at the Radian annual meeting. Radian currently expects that its directors and executive officers will vote such shares “FOR” all matters scheduled to be presented for a vote at the Radian annual meeting.

 

The presence, in person or by properly executed proxy, of the holders of a majority of the outstanding shares of Radian common stock entitled to vote is necessary to constitute a quorum at the Radian annual meeting. Abstentions and broker non-votes will be counted for the purpose of determining whether a quorum is present.

 

Assuming a quorum is present, adoption of the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of Radian common stock entitled to vote at the Radian annual meeting. Approval of the proposal relating to the adjournment of the annual meeting, if necessary or appropriate, to solicit additional proxies requires that the votes cast in favor of the proposal exceed the votes cast in opposition. You are entitled to one vote for each share of Radian common stock you held as of the record date.

 

Because the affirmative vote of the holders of a majority of the outstanding shares of Radian common stock entitled to vote at the Radian annual meeting is required to adopt the merger agreement, the failure to vote by proxy or in person will have the same effect as a vote against the merger agreement. Abstentions and broker non-votes also will have the same effect as a vote against the merger. Accordingly, the Radian board of directors urges Radian stockholders to complete, date and sign the accompanying proxy card and return it promptly in the enclosed postage-paid envelope.

 

Failures to vote and broker non-votes will have no effect on the adoption of the proposal to adjourn the annual meeting, if necessary or appropriate, to solicit additional proxies; however, abstentions, because they are considered shares “entitled to vote,” will have the same effect as votes against such proposals.

 

Appraisal Rights

 

Radian stockholders are not entitled to appraisal rights under the Delaware General Corporation Law or under Radian’s charter or bylaws in connection with the merger, and Radian will not independently provide stockholders with any such rights.

 

Participants in Radian’s Savings Incentive Plan, please note that the enclosed proxy card also constitutes the voting instruction form for shares allocated to you under the plan and covers all shares you are entitled to vote under the plan, in addition to shares you may hold directly. Signing and returning the proxy card will enable voting of all shares, including those held under the plan.

 

Voting by Telephone or the Internet

 

Many stockholders of Radian whose shares are registered in the name of a brokerage firm, bank or other nominee have the option to submit their proxies or voting instructions electronically by telephone or the internet. Such Radian stockholders should check the voting instructions forwarded by their broker, bank or other holder of record to see which options are available. Radian stockholders of record may not vote by telephone or the internet.

 

The following discussion contains material information pertaining to the merger. This discussion is a summary only and may not contain all of the information that is important to you. A copy of the merger agreement is attached to this document as Annex A and is incorporated by reference herein. We encourage you to read and review the merger agreement as well as the discussion in this joint proxy statement/prospectus.

 

The MGIC board of directors and the Radian board of directors have each unanimously approved the merger agreement, which provides for the merger of Radian with and into MGIC, with MGIC as the surviving corporation. Each share of Radian common stock outstanding prior to the merger will be converted, upon completion of the merger, into the right to receive 0.9658 shares of the common stock of MGIC. We sometimes refer to this ratio as the “exchange ratio.” As a result of the merger, shares of Radian common stock issued and outstanding immediately prior to the merger will be cancelled.

 

Each of MGIC’s and Radian’s board of directors has from time to time engaged with senior management in strategic reviews, and has considered ways to enhance its respective performance and prospects in light of competitive and other relevant developments. These strategic reviews have focused on, among other things, the business environment facing mortgage and credit risk insurers generally, as well as conditions and ongoing consolidation in the residential mortgage industry. For MGIC and Radian, these reviews have also included periodic discussions with respect to potential transactions that would further their respective strategic objectives, and the potential benefits and risks of those transactions, including for Radian during the past few years informal discussions with other potential merger partners.

 

MGIC’s board of directors had periodically considered a business combination between MGIC and Radian for a number of years. At a regularly scheduled MGIC board of directors meeting held on October 26, 2006, Curt S. Culver, MGIC’s Chairman of the Board and Chief Executive Officer, discussed with the MGIC board of directors the possibility of a business combination between MGIC and Radian. The MGIC board of directors authorized Mr. Culver to approach Radian management to gauge Radian’s interest in a combination.

 

In early November, 2006, Mr. Culver and Sanford A. Ibrahim, Radian’s Chief Executive Officer, met over dinner and discussed their mutual interest in exploring a business combination between MGIC and Radian. At that time Mr. Ibrahim stated that he needed to discuss with the Radian board of directors the proposed combination before he could discuss it further.

 

At a regularly scheduled Radian board of directors meeting held on November 14, 2006, Mr. Ibrahim described to the Radian board of directors his meeting with Mr. Culver. The Radian board of directors met again on November 30 and, following this meeting, recommended that Mr. Ibrahim continue to pursue his conversations with MGIC and explore the potential benefits of such a transaction.

 

Based on both companies’ preliminary mutual interest and the belief in the potential merits of a possible strategic transaction, Messrs. Culver and Ibrahim agreed to meet again in December with other members of their senior management teams in order to continue their exploratory discussions. At meetings held on December 8 and 18 and in follow-up phone calls on December 20, these discussions focused on the potential benefits of a combination, as well as the potential terms on which the two companies could combine. Both chief executives were in general agreement that an at-market transaction that drew on the strength of the managements and boards of both companies was most likely to deliver long-term value to the two companies’ stockholders, and they discussed the potential composition of the combined company’s board of directors and management. Discussions in December also addressed the value of preserving company brand identity and headquarters. During this time period, Mr. Culver discussed the potential combination with the members of the MGIC board of directors, and on December 21, the MGIC board of directors held a special meeting by

telephone at which the directors talked about the status of the Radian discussions. The Radian board of directors reviewed and discussed matters relating to a potential combination at meetings held on December 12 and December 27. Also during this time period, Radian retained Wachtell, Lipton, Rosen & Katz as its outside legal advisor.

 

On January 12, 2007, Messrs. Culver and Ibrahim, together with Kenneth M. Jastrow, the chairman of MGIC’s management development, nominating and governance committee, who presides over executive sessions of the MGIC board, and Radian’s non-executive chairman, Herbert Wender, met to discuss the progress of the discussions and the path forward to a potential combination. Each of them noted the support of their respective boards for a potential transaction, agreed to continue discussions and agreed to commence mutual due diligence. Later that day, MGIC and Radian executed a customary confidentiality agreement.

 

In connection with the merger, MGIC retained Goldman Sachs as its outside financial advisor and Foley & Lardner LLP as its outside legal advisor, and Radian retained Lehman as its outside financial advisor.

 

The MGIC board of directors met on January 25, 2007. Representatives of Goldman Sachs and Foley & Lardner participated in the meeting. At the meeting, Mr. Culver updated the board on the key potential transaction terms, including the at-market nature of the combination and the proposed changes in the MGIC board and the management team of the combined company. Goldman Sachs presented preliminary materials regarding, among other things, preliminary valuations of each of MGIC and Radian, as well as potential synergies and prospects for the combined company. A representative of Foley & Lardner reviewed with the directors their fiduciary obligations under Wisconsin law. The board encouraged Mr. Culver and management to continue to negotiate a transaction with Radian.

 

At about that time, the parties and their outside counsel also began preliminary drafting of the transaction documents. Discussions between representatives of MGIC and Radian continued regarding a potential business combination and the benefits for each company that could result from such a transaction. As a result of these discussions, the parties agreed to recommend to their respective boards of directors a stock merger in which Radian would merge into MGIC, with MGIC being the surviving corporation. The parties and their respective counsel also negotiated the other terms of the definitive transaction agreements and exchanged related materials.

 

The MGIC board of directors met on the morning of February 4, 2007 with, among others, senior management, Foley & Lardner and Goldman Sachs. Management reviewed for the MGIC board of directors the progress of negotiations with Radian, and reported on MGIC’s due diligence investigations of Radian, including executive compensation and benefits matters in connection with the merger. Goldman Sachs reviewed with the MGIC board of directors the structure and other terms of the potential transaction, and financial information regarding Radian, MGIC and a combination of the two companies, as well as information regarding peer companies and comparable transactions. Representatives of Foley & Lardner discussed with the MGIC board of directors the legal standards applicable to its decisions and actions with respect to its consideration of the proposed transaction, and reviewed a draft of the merger agreement. Representatives of Foley & Lardner also discussed with the MGIC board of directors the stockholder and regulatory approvals that would be required to complete the proposed merger, the likely process and timetable of the merger, including obtaining the required stockholder and regulatory approvals.

 

On Monday, February 5, 2007, Radian’s board of directors met to discuss the proposed transaction. Mr. Ibrahim and other senior Radian executives reviewed the status of discussions and negotiations with MGIC since the previous board meeting and the results of Radian’s due diligence investigation of MGIC. Members of Radian’s management also discussed the key terms of the proposed merger, including the board and management governance provisions and a proposed exchange ratio of 0.9658 shares of MGIC common stock for each share of Radian common stock, which was designed to produce an at-market exchange ratio based on the ratio of the closing market price of Radian common stock on Friday, February 2, 2007 to the closing market price of MGIC common stock on February 2, 2007. Management and Radian’s advisors also discussed with the board accretion/dilution analysis, the companies’ corporate cultures, the business mix of the two companies, estimated expense savings and potential revenue opportunities. Representatives from Lehman reviewed the financial terms of the proposed merger and presented its financial analysis of the transaction.

Lehman subsequently rendered to the Radian board of directors its oral opinion (later confirmed in writing) that, as of February 5, 2007, and based upon the assumptions made, procedures followed, matters considered and limitations on the review undertaken by Lehman all as set forth in its written opinion, the exchange ratio pursuant to the merger agreement was fair, from a financial point of view, to holders of Radian common stock.

 

Representatives of Wachtell, Lipton, Rosen & Katz discussed with the Radian board of directors the legal standards applicable to its decisions and actions with respect to its consideration of the proposed transaction, and reviewed the legal terms of the proposed transaction agreements, including the employment agreements with Mr. Ibrahim and other executives. Representatives of Wachtell, Lipton, Rosen & Katz also discussed with the Radian board of directors the stockholder and regulatory approvals that would be required to complete the proposed merger, the likely process and timetable of the merger including obtaining the required stockholder and regulatory approvals and compensation and benefits issues in connection with the merger. Wachtell, Lipton, Rosen & Katz also reviewed for the Radian board of directors a set of draft resolutions relating to the proposed merger. Following the presentations, Radian directors posed questions to members of Radian’s management, representatives of Wachtell, Lipton, Rosen & Katz and representatives of Lehman.

 

Following these discussions, and review and discussion among the members of the Radian board of directors, including consideration of the factors described under “— Radian’s Reasons for the Merger; Recommendation of Radian’s Board of Directors,” the Radian board of directors unanimously determined that the transactions contemplated by the merger agreement and the related transactions and agreements are advisable and in the best interests of Radian and its stockholders, and the directors voted unanimously to approve the merger with MGIC, to approve and adopt the merger agreement, to approve the related transactions and agreements, and to approve the resolutions relating to the proposed merger.

 

Also on February 5, the board of directors of MGIC met with senior management and their outside legal and financial advisors. Mr. Culver and senior management updated the board on the status of the negotiations with Radian, including the proposed 0.9658 exchange ratio. In connection with the deliberation by the MGIC board of directors, Goldman Sachs made a presentation to the board regarding the fairness of the exchange ratio and rendered to the board its oral opinion (subsequently confirmed in writing), as described under “— Opinion of MGIC’s Financial Advisor,” that, as of February 5, 2007, and subject to the factors and assumptions set forth in its written opinion, the exchange ratio in the merger was fair from a financial point of view to MGIC.

 

Following these discussions, and continued deliberations among the members of the MGIC board of directors, including consideration of the factors described under “— MGIC’s Reasons for the Merger; Recommendation of MGIC’s Board of Directors,” the MGIC board of directors unanimously determined that the transactions contemplated by the merger agreement and the related transactions and agreements are advisable and in the best interests of MGIC and its stockholders, and the directors voted unanimously to approve the merger agreement and to approve the related transactions and agreements.

 

Early on the morning of February 6, 2007, the parties executed and delivered the merger agreement. Also at that time, MGIC entered into contingent employment agreements with Messrs. Ibrahim and Casale and Ms. Bryce. The merger was announced on the morning of February 6, 2007 in a press release issued jointly by MGIC and Radian.

 

In reaching its decision to adopt the merger agreement and recommend adoption of the merger agreement to the MGIC stockholders, the MGIC board of directors consulted with MGIC’s management, as well as with its outside legal and financial advisors, and considered a number of factors, including:

 

 

 

MGIC’s board also considered the potential risks outlined below, but concluded that the anticipated benefits of combining with Radian were likely to outweigh substantially these risks. The risks included:

 

 

In view of the wide variety of factors considered in connection with its evaluation of the merger and the complexity of these matters, the MGIC board of directors did not attempt to quantify or assign any relative or specific weights to the various factors that it considered in reaching its determination to approve the merger and the merger agreement and recommend that MGIC stockholders vote “FOR” the adoption of the merger agreement. In addition, individual members of the MGIC board of directors may have given differing weights to different factors. The MGIC board of directors conducted an overall analysis of the factors described above, including thorough discussions with, and questioning of, MGIC’s management and outside legal and financial advisors. The MGIC board of directors also considered the advice of Goldman Sachs, its financial advisor, as well as Goldman Sachs’ analyses of the financial terms of the merger and relied on its opinion as to the fairness, from a financial point of view, of the exchange ratio in the merger to MGIC.

 

It should be noted that a portion of this explanation of the MGIC board’s reasoning and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under the heading entitled “Cautionary Statement Regarding Forward-Looking Statements.”

 

Stockholder Vote Required

 

The affirmative vote of a majority of the outstanding shares of MGIC common stock is required to adopt the merger agreement. Abstentions and broker non-votes, as well as failing to vote by not returning your proxy card, because they are not affirmative votes, will have the same effect as a vote against this proposal.

 

Recommendation

 

THE MGIC BOARD OF DIRECTORS UNANIMOUSLY DETERMINED THAT THE MERGER, THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT ARE ADVISABLE AND IN THE BEST INTERESTS OF MGIC AND ITS STOCKHOLDERS AND UNANIMOUSLY APPROVED AND ADOPTED THE MERGER AGREEMENT. THE MGIC BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT MGIC STOCKHOLDERS VOTE “FOR” THE ADOPTION OF THE MERGER AGREEMENT. PROXIES WILL BE VOTED “FOR” ADOPTION UNLESS A STOCKHOLDER GIVES OTHER INSTRUCTIONS ON THE PROXY CARD.

 

In reaching its decision to adopt the merger agreement and recommend adoption of the merger agreement to the Radian stockholders, the Radian board of directors consulted with Radian’s management, as well as with its outside legal and financial advisors, and considered a number of factors, including:

 

 

Radian’s board also considered the potential risks outlined below, but concluded that the anticipated benefits of combining with MGIC were likely to outweigh substantially these risks. The risks included:

 

 

In view of the wide variety of factors considered in connection with its evaluation of the merger and the complexity of these matters, the Radian board of directors did not attempt to quantify or assign any relative or specific weights to the various factors that it considered in reaching its determination to approve the merger and the merger agreement and recommend that Radian stockholders vote “FOR” the adoption of the merger agreement. In addition, individual members of the Radian board of directors may have given differing weights to different factors. The Radian board of directors conducted an overall analysis of the factors described above, including thorough discussions with, and questioning of, Radian’s management and outside legal and financial advisors. The Radian board of directors also considered the advice of Lehman Brothers, its financial advisor, as well as Lehman’s analyses of the financial terms of the merger and relied on its opinion as to the fairness, from a financial point of view, of the exchange ratio in the merger to Radian’s stockholders.

 

It should be noted that this explanation of the Radian board’s reasoning and all other information presented in this section is forward-looking in nature and, therefore, should be read in light of the factors discussed under the heading entitled “Cautionary Statement Regarding Forward-Looking Statements.”

 

Stockholder Vote Required

 

The affirmative vote of a majority of the outstanding shares of Radian’s common stock is required to adopt the merger agreement. Abstentions and broker non-votes, as well as failing to vote by not returning your proxy card, because they are not affirmative votes, will have the same effect as a vote against this proposal.

 

Recommendation

 

FOR THE REASONS SET FORTH ABOVE, THE RADIAN BOARD OF DIRECTORS DETERMINED THAT THE MERGER, THE MERGER AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT ARE ADVISABLE AND IN THE BEST INTEREST OF RADIAN AND ITS STOCKHOLDERS, AND UNANIMOUSLY APPROVED AND ADOPTED THE MERGER AGREEMENT. THE RADIAN BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE RADIAN STOCKHOLDERS VOTE “FOR” THE ADOPTION OF THE MERGER AGREEMENT. PROXIES WILL BE VOTED “FOR” ADOPTION UNLESS A STOCKHOLDER GIVES OTHER INSTRUCTIONS ON THE PROXY CARD.

 

MGIC engaged Goldman Sachs as its financial advisor and Radian engaged Lehman as its financial advisor in connection with the merger based on their experience and expertise. Goldman Sachs and Lehman

are internationally recognized investment banking firms that have substantial experience in transactions similar to the merger.

 

Goldman Sachs delivered its oral opinion (subsequently confirmed in writing) to MGIC’s board of directors that, based upon and subject to the factors and assumptions set forth in the written opinion, the exchange ratio (the “Exchange Ratio”) of 0.9658 shares of MGIC common stock to be issued in exchange for each share of Radian common stock pursuant to the merger agreement was fair from a financial point of view to MGIC.

 

The full text of the written opinion of Goldman Sachs, dated February 6, 2007, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Annex B. Goldman Sachs provided its opinion for the information and assistance of MGIC’s board of directors in connection with its consideration of the merger. The Goldman Sachs opinion is not a recommendation as to how any holder of MGIC common stock should vote with respect to the merger.

 

In connection with rendering the opinion described above and performing its related financial analyses, Goldman Sachs reviewed, among other things:

 

 

Goldman Sachs also held discussions with members of the senior managements of MGIC and Radian regarding their assessment of the strategic rationale for, and the potential benefits of, the merger and the past and current business operations, financial condition and future prospects of MGIC and Radian. In addition, Goldman Sachs reviewed the reported price and trading activity for the shares of the MGIC common stock and the shares of Radian common stock, compared certain financial and stock market information for Radian and MGIC with similar information for certain other companies the securities of which are publicly traded, reviewed the financial terms of certain recent business combinations in the financial institutions industry specifically and in other industries generally and performed such other studies and analyses, and considered such other factors, as it considered appropriate.

 

Goldman Sachs relied upon the accuracy and completeness of all the financial, legal, accounting, tax and other information discussed with or reviewed by it and assumed such accuracy and completeness for purposes of rendering the opinion described above. In that regard, Goldman Sachs has assumed with MGIC’s consent that the Synergies have been reasonably prepared on a basis reflecting the best currently available estimates and judgments of the managements of MGIC and Radian and that the Synergies will be realized. Based on Goldman Sachs’ discussions with MGIC and at MGIC’s direction, it assumed that the Forecasts were a reasonable basis upon which to evaluate the future performance of MGIC and Radian, and at MGIC’s direction it used the Forecasts for purposes of its analyses and its opinion. Goldman Sachs also assumed that

all governmental, regulatory or other consents and approvals necessary for the completion of the merger will be obtained without any adverse effect on MGIC or Radian or on the expected benefits of the merger in any way meaningful to its analysis.

 

Goldman Sachs has not made an independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or off-balance-sheet assets and liabilities) of MGIC or Radian or any of their respective subsidiaries, nor was any evaluation or appraisal of the assets or liabilities of MGIC or Radian or any of their respective subsidiaries furnished to Goldman Sachs. Goldman Sachs is not an actuary and its services did not include any actuarial determination or evaluation by it or any attempt to evaluate actuarial assumptions and Goldman Sachs has relied on MGIC’s actuaries with respect to reserve adequacy, including the adequacy of future policy benefit reserves. In that regard, Goldman Sachs has made no analysis of, and expressed no opinion as to, the adequacy of the loss and loss adjustments expenses reserves, the future policy benefit reserves, the long-term business provision and claims outstanding or the embedded value of MGIC and Radian. Goldman Sachs also assumed that to the extent necessary Credit-Based Asset Servicing and Securitization LLC and Sherman Financial Group LLC will be restructured to permit deconsolidation for GAAP consolidated financial statement reporting purposes.

 

Goldman Sachs’ opinion does not address the underlying business decision of MGIC to engage in the merger. In addition, Goldman Sachs did not express any opinion as to the prices at which shares of the MGIC common stock will trade at any time. Goldman Sachs’ opinion is necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to it as of February 6, 2007. Goldman Sachs’ advisory services and its opinion were provided for the information and assistance of the Board of Directors of MGIC in connection with its consideration of the merger and Goldman Sachs’ opinion does not constitute a recommendation as to how any holder of the MGIC common stock should vote with respect to the merger.

 

The following is a summary of the material financial analyses delivered by Goldman Sachs to the board of directors of MGIC in connection with rendering the opinion described above. The following summary, however, does not purport to be a complete description of the financial analyses performed by Goldman Sachs, nor does the order of analyses described represent relative importance or weight given to those analyses by Goldman Sachs. Some of the summaries of the financial analyses include information presented in tabular format. The tables must be read together with the full text of each summary and are alone not a complete description of Goldman Sachs’ financial analyses. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before February 6, 2007 and is not necessarily indicative of current market conditions.

 

Historical Stock Trading Analysis.  Goldman Sachs reviewed and compared the stock price performance of the MGIC common stock and Radian common stock with that of the common stock of PMI Group, Inc. (“PMI”) and Triad Guaranty Inc. (“Triad Guaranty”) for the five-year, three-year and one-year periods ended February 2, 2007. The results of the analysis are as follows: