A.M. Best has removed from under review with developing
implications and affirmed the financial strength rating of A-
(Excellent) and the issuer credit ratings (ICR) of “a-” of the key
life/health subsidiaries of Genworth Financial, Inc.
(Genworth) (Richmond, VA) [NYSE:GNW]. Additionally, the ICR of
“bbb-” of Genworth and its existing issue ratings have been removed
from under review and affirmed. Concurrently, A.M. Best has
assigned ratings to Genworth’s shelf registration, effective May
2015, which replaced the previously expired shelf. The outlook
assigned to all ratings is negative.
On May 1, 2015, A.M. Best placed Genworth’s ratings under review
with developing implications in response to the company’s public
disclosure that it was assessing the market interest and
considering the merits of selling its life and annuity businesses.
The removal of the under review status follows Genworth’s public
announcement, during the second quarter 2015 earnings call on Aug.
5, 2015, that the company has terminated the proposed strategic
divestiture of its life and annuity businesses. However, there
remains potential that the company may pursue smaller, targeted
block transactions. As such, A.M. Best will continue to closely
monitor the overall diversification of insurance risks within the
organization.
The assignment of the negative outlook reflects A.M. Best’s
concerns with the volatility of earnings, lack of growth in its
life and annuity operations and the organizations’ challenge to
improve sales following the recent strategic uncertainty, as well
as the inherent volatility of the long-term care business. Further
divestiture in its non-insurance operations, which provide a steady
stream of dividends to the Genworth organization, may reduce
financial flexibility.
A.M. Best notes that as of second quarter 2015, Genworth has
positioned itself to be compliant with Private Mortgage Insurer
Eligibility Requirements (PMIERS) within the required timeframe.
The company continues to report good financial flexibility at the
holding company, with $1.2 billion of cash and invested assets, and
financial leverage was approximately 27% as of June 30, 2015. A.M.
Best expects that Genworth management will continue to refrain from
taking dividends from the life/health companies in the medium term,
servicing holding company needs from its global mortgage insurance
subsidiaries.
The FSR of A- (Excellent) and the ICRs of “a-” for the following
subsidiaries of Genworth Financial, Inc. have been affirmed
and assigned a negative outlook:
- Genworth Life Insurance
Company
- Genworth Life Insurance Company of
New York
- Genworth Life and Annuity Insurance
Company
The ICRs of “bbb-” of Genworth Financial, Inc. and
Genworth Holdings, Inc. have been affirmed and assigned a
negative outlook.
The following indicative issue ratings on securities available
under universal shelf registration have been assigned with a
negative outlook:
Genworth Financial, Inc.—
-- “bbb-” on senior unsecured debt
-- “bb+” on subordinated debt
-- “bb” on preferred stock
Genworth Holdings, Inc.—
-- “bbb-” on senior unsecured debt
-- “bb+” on subordinated debt
-- “bb” on preferred stock
The following issue ratings have been affirmed and assigned a
negative outlook:
Genworth Holdings, Inc. (guaranteed by Genworth
Financial, Inc.) —
-- “bbb-” on $300 million 8.625% senior unsecured notes, due
2016
-- “bbb-” on $600 million 6.515% senior unsecured notes, due
2018
-- “bbb-” on $400 million 7.70% senior unsecured notes, due
2020
-- “bbb-” on $400 million 7.20% senior unsecured notes, due
2021
-- “bbb-” on $750 million 7.625% senior unsecured notes, due
2021
-- “bbb-” on $400 million 4.9% senior unsecured notes, due
2023
-- “bbb-” on $400 million 4.8% senior unsecured notes, due
2024
-- “bbb-” on $300 million 6.50% senior unsecured notes, due
2034
-- “bb” on $600 million fixed/floating rate junior subordinated
notes, due 2066
Genworth Global Funding Trusts— “a-” program rating
-- “a-” on all outstanding notes issued under the program
This press release relates to rating(s) that have been
published on A.M. Best's website. For all rating information
relating to the release and pertinent disclosures, including
details of the office responsible for issuing each of the
individual ratings referenced in this release, please visit A.M.
Best’s Ratings & Criteria Center.
A.M. Best Company is the world's oldest and most
authoritative insurance rating and information source. For more
information, visit www.ambest.com.
Copyright © 2015 by A.M. Best Company,
Inc. ALL RIGHTS RESERVED.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150805006718/en/
A.M. Best CompanyKate Steffanelli, 908-439-2200, ext.
5063Senior Financial
Analystkate.steffanelli@ambest.comorSally Rosen,
908-439-2200, ext. 5280Assistant Vice
Presidentsally.rosen@ambest.comorChristopher Sharkey,
908-439-2200, ext. 5159Manager, Public
Relationschristopher.sharkey@ambest.comorJim Peavy,
908-439-2200, ext. 5644Assistant Vice President, Public
Relationsjames.peavy@ambest.com
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