Troubled mortgage insurer MGIC Investment Corp. in Milwaukee said it sold $420 million in common stock and $325 million in convertible debenture bonds today.

Asked if the move was to bolster the company financial picture, Katie Monfre, a company spokesperson, repeated the firm's statement that the offerings were sold "to raise capital to expand the volume of new business."

The firm sold 37,333,333 shares of its common stock at $11.25 per share. The $420 million from the sale followed a 20 percent increase in the size of the offering over what MGIC had previously announced.

MGIC also granted to the underwriters of the public offering an option to purchase an additional 5,600,000 shares of common stock at the same price.

The 9 percent Convertible Junior Subordinated Debentures offering matures in 2063. MGIC also said it granted to the initial purchaser an option to purchase an additional $65 million aggregate principal amount of debentures.

The debentures, sold in a private placement to institutional buyers, will be convertible, at an initial conversion rate of 74.0741 shares per $1,000 of debentures. MGIC said this represents a 20 percent conversion premium based on the $11.25 per share price in the concurrent common stock offering.

Last week Moody's cut MGIC's senior debt rating to "A2," the sixth highest investment grade, one rung below its previous "A1" rating.

The company last month reported a $1.47 billion quarterly loss with increasing numbers of homeowners falling into arrears and a seven-fold rise in claims.

Also last month, Fitch Ratings placed the "double-A" insurer financial strength rating of MGIC on Rating Watch Negative. Fitch said that the company "maintains relatively higher exposure to soft markets and riskier product classes through its bulk and pool business lines relative to most of its competitors, and Fitch believes these products are likely to perform considerably worse than recent history."

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