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Radian Group Inc. is seeking to sell bond insurer Radian Asset and Assured Guaranty or MBIA may turn out to be the buyer.
Much of Radian Group's activity is as a private mortgage insurer that works with Freddie Mac and Fannie Mae. The Federal Housing Finance Agency is changing the capital requirements for private mortgage insurers.
These requirements would disallow a large part of Radian Group's capital because of its structure, according to Macquarie Capital analysts Sean Dargan and Tanmay Gupta.
The FHFA has plans to bring the capital requirements into effect in 2015, though some insurers may be given a transition period of up to two additional years, according to Radian.
As a consequence, Radian Group is believed to be attempting to "monetize" Radian Asset, probably by selling it, Dargan said.
"In July of this year,...