Amended Agreement is Structured to Preserve Value of Net Operating Losses

MILWAUKEE, July 7 /PRNewswire-FirstCall/ -- MGIC Investment Corporation (NYSE: MTG) today announced that it has amended and restated the company's shareholder rights agreement originally adopted in 1999. The amended rights agreement has a 5% ownership trigger to help preserve the value of federal income tax net operating losses ("NOLs") that the company is incurring in 2009 and expects to incur thereafter. The amendment also extends the agreement's term to August 17, 2012 from July 22, 2009 and decreases the current exercise price of the rights to $25 per full common share.

Section 382 of the Internal Revenue Code generally allows a company to use NOLs to offset future taxable income and therefore reduce federal income tax obligations. However, the company's ability to use its NOLs would be limited if there was an "ownership change" under Section 382. An ownership change would occur if shareholders viewed under Section 382 as owning 5% or more of the company's stock increase their collective ownership by more than 50 percentage points over a defined period of time. The amended rights agreement discourages those shareholders from making certain purchases of stock that could cause an "ownership change" to occur, which potentially could have an adverse impact on NOL carryovers and other shareholders.

Effective at 5:00 p.m. Central Time on July 7, 2009, if any person and its affiliates collectively becomes the beneficial owner of 5% or more of the outstanding shares of company common stock, there would be a triggering event causing significant dilution in the voting power and economic interests of such person and its affiliates. The amended rights agreement generally defines beneficial ownership in a manner consistent with the existing rights agreement. The amended agreement also provides that a person beneficially owns any stock that it would be deemed to own under Section 382 and related regulations.

Existing shareholders who immediately before 5 p.m. Central Time on July 7, 2009 beneficially own 5% or more of the outstanding shares will trigger a dilutive event only if they increase their percentage ownership of the stock, other than an increase resulting from the company's repurchase of its shares. Under certain conditions, the rights agreement contains an exception from a triggering event for persons and their affiliates whom the Board of Directors determines have inadvertently become beneficial owners of 5% or more of the outstanding shares.

About MGIC Investment Corporation

MGIC (www.mgic.com), the principal subsidiary of MGIC Investment Corporation, is the nation's leading provider of private mortgage insurance coverage with $223.9 billion primary insurance in force covering 1.4 million mortgages as of March 31, 2009. MGIC serves over 3,300 lenders with locations across the country, Puerto Rico, and other locations helping families achieve homeownership sooner by making affordable low-down-payment mortgages a reality.

Safe Harbor Statement

Forward Looking Statements and Risk Factors:

Actual results could be affected by the events described in the risk factors below and could differ materially from the results contemplated by forward looking statements in this press release. Forward looking statements consist of statements which relate to matters other than historical fact, including matters that inherently refer to future events. Among others, statements that include words such as we "believe", "anticipate" or "expect", or words of similar import, are forward looking statements. We are not undertaking any obligation to update any forward looking statements in this press release even though these statements may be affected by events or circumstances occurring after such forward looking statements were made. No investor should rely on the fact that such forward looking statements are current at any time other than the time at which this press release was issued.

The amount of our NOLs would be affected by the amount of our taxable losses and our ability to utilize the value of our NOLs could be affected by our ability to generate future taxable income. Among other factors, our ability to generate future taxable income, and the amount of our future taxable losses, could be affected by: (i) any restrictions on our writing new insurance, such as from our risk-to-capital increasing beyond the levels necessary to meet regulatory requirements; (ii) changes in the business practices of Fannie Mae and Freddie Mac; (iii) a downturn in the domestic economy or deterioration in home prices in the segment of the market we serve; (iv) the mix of business we write; and (vi) disruptions in the servicing of mortgage loans that we insure. In addition, whether the rights agreement will be effective in deterring investors from taking actions that result in an "ownership change" (as referred to in this press release) could depend on the willingness of such investors to trigger the rights agreement and incur the dilution provided by the rights agreement upon such a triggering.

SOURCE MGIC Investment Corporation

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