RADIAN GROUP INC

We face risks associated with our acquisition of Inigo and our ability to successfully execute our strategic evolution into a global multi-line specialty insurer.

As previously disclosed, we recently closed on our acquisition of Inigo on February 2, 2026.

Our acquisition of Inigo, a specialty insurer and reinsurer operating through the Lloyd’s of London market, is part of our strategic evolution into a global multi-line specialty insurer and exposes us to certain risks that may negatively affect our financial condition and results of operations. These risks include: (i) potential diversion of management’s attention from regular ongoing business operations due to integration activities; (ii) potential unknown or inestimable liabilities associated with Inigo; (iii) uncertainty about the expected future financial performance and results of Inigo and its businesses, including potential volatility in our earnings and loss ratios; (iv) the possibility that we may be unable to realize the anticipated benefits of the transaction including the expected financial impact of the Inigo acquisition on us, capital efficiencies and benefits of scale and non-correlated diversification; (v) risks associated with entering new markets and lines of business in which the existing Radian Group leadership team has limited prior experience; (vi) our ability to comply with new regulatory requirements and manage international operations; (vii) risks associated with the geographic expansion of our employee base, including any inability to maintain an effective Company culture; and (viii) the risk that we are unable to attract, hire, and retain key and highly skilled employees and to motivate them to perform.

The use of the Intercompany Note to fund a portion of the Inigo acquisition reduced our liquidity and Radian Guaranty’s PMIERs Cushion, and subjects us to certain conditions and compliance obligations associated with the Intercompany Note which could adversely affect us and our financial condition.

Radian Group paid a portion of the cash consideration for the Inigo acquisition with proceeds from the Intercompany Note. As a condition to receiving the approval of the Pennsylvania Insurance Department for the Intercompany Note, we have agreed to provide certain enhanced reporting to the Pennsylvania Insurance Department while the Intercompany Note is outstanding and to prepay the borrowing prior to maturity, in whole or in part, if Radian Guaranty needs additional liquidity to meet its policyholder obligations. Additionally, Radian Guaranty is required to comply with certain conditions while the Intercompany Note is outstanding, including, most notably, obtaining prior approval from the Pennsylvania Insurance Department for all dividends paid by Radian Guaranty for a period of at least three years and no more than five years, and maintaining a minimum policyholders’ surplus of $500 million. The Intercompany Note reduced Radian Guaranty’s PMIERs Cushion by the principal amount of the note.

In addition to the proceeds from the Intercompany Note, the Company used cash and liquid investments on its balance sheet, and borrowed under its revolving credit facility, to pay the remaining cash portion of the closing consideration of $1.65 billion for the Inigo acquisition, which reduced the Company’s liquidity and available liquidity post-closing. Further, as discussed above, the conditions in place while the Intercompany Note is outstanding could reduce or delay the payment of dividends from Radian Guaranty to Radian Group, which could further negatively impact Radian Group’s liquidity and financial flexibility.

Our use of cash and the Intercompany Note to fund a portion of the purchase price of the Inigo acquisition and the resulting reduction in our liquidity and Radian Guaranty’s PMIERs Cushion, may, among other things, limit our flexibility to pursue other business opportunities, increase our vulnerability to adverse economic and industry conditions, or negatively impact our credit ratings. We also may pursue financing transactions to raise capital, increase our liquidity and strengthen our financial position, which transactions may be unavailable to us on attractive terms or at all.

We may face difficulties, unforeseen liabilities, or rating actions from our acquisition or the integration of Inigo and may not realize all of the anticipated benefits of such acquisition.

Our acquisition of Inigo exposes us to risks arising from, among other factors, economic, operational, strategic, financial, tax, legal, regulatory and compliance, any one or a combination of which could possibly result in the failure to realize the anticipated economic, strategic or other benefits of the transaction. Additionally, the acquisition exposes us to additional information technology, cybersecurity and data privacy risks. Differences in systems, architectures, controls, third-party dependencies and regulatory environments may increase the complexity of aligning technologies and cybersecurity practices. We may also inherit legacy software or technologies, previously unidentified vulnerabilities or incompatible architectures. If we are unable to effectively manage post-acquisition risks, we may encounter increased costs, operational disruptions, cybersecurity incidents, regulatory exposure or reputational harm, any of which could adversely affect our business or operations.

Further, the integration of the operations and employees of Inigo may prove more difficult than anticipated, due to unknown or contingent liabilities; unanticipated issues in integrating information, management style, controls and procedures, servicing and originations practices, communications and other systems including information technology systems; unanticipated incompatibility of purchasing, logistics, marketing and administration methods; and employee, customer, business partner and service provider retention difficulties, any of which may result in failure to achieve financial objectives associated with the acquisition or a significant diversion of management attention which could negatively impact our overall bottom line.

We could also be subject to additional risks associated with our expansion into new geographic regions through the Inigo acquisition. These risks include the impact of poor general economic or market conditions due to geopolitical conflicts, natural disasters or other localized issues; increased regulatory risk associated with international operations; and changes in assets and liabilities acquired if subject to foreign currency exchange rate fluctuations.

Any of the additional risks described above and other potential impacts of the Inigo acquisition could also have unintended consequences on ratings assigned by the rating agencies to us and could prevent us from achieving the benefits we expect from such transaction and/or result in a material adverse effect on our business.