United Guaranty has filed an S-1 form with the U.S. Securities and Exchange Commission (SEC) regarding its initial public offering (IPO). No pricing details were given in the filing, but the offering is valued up to $100 million. American International Group Inc. (NYSE: AIG) is offering the shares as the parent company. United Guaranty intends to list on the New York Stock Exchange but has yet to decide a symbol.
The only underwriters for this offering are JPMorgan and Morgan Stanley.
This is the leading private mortgage insurance company in the United States. It was formed in 1963 and has been a wholly owned subsidiary of AIG since 1981. The company believes that its position as the leader in the U.S. private mortgage insurance market reflects its long-standing operating history, strong and diverse customer relationships, proprietary risk-based pricing framework and robust financial strength.
In the filing United Guaranty detailed:
We have a large and diverse customer base. Our long-standing presence in the private mortgage insurance market has allowed us to build customer relationships with many of the nation’s largest and highest quality lenders, including national and regional mortgage banks, money center banks, credit unions, community banks, builder-owned mortgage lenders and internet-sourced lenders. We have active relationships (defined as customers who delivered new insurance written (NIW) during the 12 months ending December 31, 2015) with over 1,800 customers. Our customer base is broadly diversified by lender size, type and geography, with no one customer representing more than 6% of our NIW in 2015. We have a national sales force of approximately 100 professionals, which we believe to be one of the largest in the industry, that helps drive growth in our client franchise.
The company has a large and high-quality book of existing in-force mortgage insurance policies with $183.5 billion of insurance in-force (IIF) and $47.4 billion of gross risk in-force (RIF) as of the end of December. As of December 31, 2015, over 80% of its gross RIF was written after 2008, and its portfolio had an average loan-to-value ratio (LTV) of 92% and an average Fair Isaac Corporation (FICO) credit score of 738. Only 3.4% of insured policies were reported to be delinquent at the end of 2015.
United Guaranty will not receive any proceeds from the offering. Instead all the proceeds will go to AIG.
Shares of AIG closed Wednesday up 2% at $54.52, with a consensus analyst price target of $63.11 and a 52-week trading range of $50.20 to $64.93.
The Average American Is Losing Momentum On Their Savings Every Day (Sponsor)
If you’re like many Americans and keep your money ‘safe’ in a checking or savings account, think again. The average yield on a savings account is a paltry .4%1 today. Checking accounts are even worse.
But there is good news. To win qualified customers, some accounts are paying more than 7x the national average. That’s an incredible way to keep your money safe and earn more at the same time. Our top pick for high yield savings accounts includes other benefits as well. You can earn a $200 bonus and up to 7X the national average with qualifying deposits. Terms apply. Member, FDIC.
Click here to see how much more you could be earning on your savings today. It takes just a few minutes to open an account to make your money work for you.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
Our expert who first called NVIDIA in 2009 is predicting 2025 will see a historic AI breakthrough.
You can follow him investing $500,000 of his own money on our top AI stocks for free.