Radian Group's Stock Rallies After Asset Assurance Sale Agreement

Radian Group's stock ran up 7.8% in premarket trade Tuesday, after its Radian Guaranty mortgage insurance subsidiary agreed to sell its stake in Radian's financial guaranty insurance business, Radian Asset Assurance, for about $810 million in cash to Assured Guaranty Corp. . The sale is expected to be completed in the first half of 2015. Assured Guaranty's stock was still inactive ahead of Monday's open. "While Radian Asset has been an important part of our history and our success, we are committed to streamlining our business and aligning our strategy toward the mortgage and real estate markets," said Radian Chief Executive S.A. Ibrahim. He believes the sale will help the company comply with the Federal Housing Finance Agency's new private mortgage insurer eligibility requirements (PMIERs). Radian's stock has gained 15% this year through Monday, compared with a 12% rise in the S&P 500.