by Calculated Risk on 7/30/2007 06:21:00 PM

Press Release: MGIC Investment Provides Update on C-BASS Investment

MGIC Investment Corporation announced today that it has concluded that the value of its investment in Credit-Based Asset Servicing and Securitization LLC has been materially impaired.

The investment (including $50 million within the last 10 days):

MGIC's investment in C-BASS consists of approximately $466 million of equity as of June 30, 2007 and an additional $50 million drawn on July 20 and 23, 2007 under a $50 million unsecured credit facility that MGIC provided to C-BASS.

And the kicker:

MGIC has not determined the range of an impairment charge, although the upper boundary of the range could be MGIC's entire investment, less any associated tax benefit.

UPDATE: Radian makes the same comments: Radian Comments on C-BASS Investment

Since February 2007, the market for subprime mortgages has experienced significant turmoil, with market dislocations accelerating to unprecedented levels beginning in mid-July 2007 and further deteriorating in the last few days.

Radian's investment in C-BASS consists of approximately $468 million of equity as of June 30, 2007 and an additional $50 million drawn on July 20 and 23, 2007 under a $50 million unsecured credit facility that Radian provided to C-BASS. On a pro forma basis reflecting the amounts drawn under this credit facility, Radian's investment in C-BASS was approximately $518 million. Radian has not determined the impairment charge, although it could be Radian's entire investment, less any associated tax benefit.