UPDATE 1-Radian adopts tax benefit preservation plan

* Sets div of 1 preferred shr purchase right per common shr

* Sets 4.9 pct trigger for rights to be exercisable

* Issuance of rights not to affect co's reported EPS

Oct 8 (Reuters) - Mortgage insurer Radian Group Inc (RDN.N) said it has declared a dividend of one preferred share purchase right for each outstanding common share, as part of a tax benefit plan adopted by its board.

The tax benefit plan was adopted to reduce the likelihood that Radian's use of its net operating losses (NOLs) would be substantially limited under Section 382 of the Internal Revenue Code, the company said.

The rights are not currently exercisable and initially will trade only with the common stock. They will trigger if anyone were to acquire 4.9 percent or more of Radian's outstanding common stock, the company said.

"A tax benefit preservation plan protects the interests of our stockholders by preserving valuable corporate assets," Chief Executive S. A. Ibrahim said.

The plan is also designed to protect the tax benefits of the company's net operating loss carryforwards and built-in losses, Ibrahim added.

The issuance of the rights will not affect the company's reported earnings per share, Radian said in a statement.

The dividend will be payable to holders of record as of Oct. 19.

Shares of the Philadelphia, Pennsylvania-based company were up a cent at $8.83 after the bell on Thursday. (Reporting by Brenton Cordeiro in Bangalore; Editing by Pradeep Kurup)