RELIANCE'S MORTGAGE INSURANCE UNIT PLANS PUBLIC OFFERING
RELIANCE'S MORTGAGE INSURANCE UNIT PLANS PUBLIC OFFERING NEW YORK, Aug. 24 /PRNewswire/ -- Reliance Group Holdings, Inc.
(NYSE: REL) announced today that its wholly owned subsidiary, CMAC Investment Corporation, plans a public offering of 9,100,000 shares of common stock at a proposed maximum offering price of $24 per share. An additional 1,300,000 shares will be available to cover any over- allotments in the offering.
Of the 9,100,000 shares to be offered, 3,400,000 shares are being sold by CMAC and 5,700,000 shares are being sold by Reliance's Commonwealth Land Title Insurance Company subsidiary. The 1,300,000 shares available for over-allotments represent the balance of Reliance's investment in CMAC. Assuming no exercise of the over-allotment option, Reliance, through Commonwealth, will own 12.5 percent of CMAC's common stock after the offering. If the over-allotment option is exercised in full, Reliance would have no ownership position. Lehman Brothers and Salomon Brothers Inc are the managing underwriters for the public offering. Concurrent with the offering, CMAC will sell 800,000 shares of $4.125 redeemable preferred stock to Commonwealth for a total purchase price of $40 million. Proceeds to CMAC from the offering and from the sale of preferred stock to Commonwealth will be used for general corporate purposes, primarily to provide additional surplus to its principal subsidiary, Commonwealth Mortgage Assurance Company. Commonwealth Mortgage Assurance Company provides private mortgage insurance in the United States to residential mortgage lenders, including mortgage bankers, mortgage brokers, commercial banks, savings institution and credit unions. Private mortgage insurance, also known as mortgage guaranty insurance, protects lenders from default-related losses on residential first mortgage loans made to home buyers who make down payments of less than 20 percent of a home's purchase price, and facilitates the sale of such mortgage loans in the secondary mortgage market. Reliance Group Holdings, Inc., headquartered in New York, has major property and casualty, life, title and mortgage insurance operations and provides consulting and technical services. Reliance has assets of $11.2 billion and had 1991 revenues of $3.4 billion. A registration statement relating to the common stock has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to a registration or qualification under the securities laws of any such state. A copy of the preliminary prospectus relating to these securities will be obtainable in the near future from Lehman Brothers, 34 Hubert Street, New York, N.Y. 10013; or Salomon Brothers Inc, 7 World Trade Center, New York, N.Y. 10048. -0- 8/24/92 /CONTACT: Brian T. Martin, vice president-communications, Reliance Group Holdings, 212-909-1247/ (REL) CO: Reliance Group Holdings, Inc.; CMAC Investment Corp. ST: New York IN: INS SU: OFR
SH-TS -- NY018 -- 2499 08/24/92 10:18 EDT
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|Date:||Aug 24, 1992|
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