Moody's rates Genworth

Moody's Investors Service said it assigned an A2 senior debt rating and a Prime-1 short-term debt rating for commercial paper to Genworth Financial Inc.

The outlook is stable.

The proceeds from the issuance of $1.9 billion of senior debt will be used to repay a portion of a $2.4 billion bridge loan from General Electric Financial Assurance Inc., its majority owner following the recent initial public offering of a 30% ownership share of Genworth. Moody's said that it expects Genworth's initial borrowings under its $1 billion commercial paper program to be about $500 million.

Moody's said that Genworth's strengths include a strong market position in the company's core life and mortgage insurance products, as well as multi-channel distribution systems, good product breadth, scale advantages, and a good technology platform for the life insurance sector. A strong management team with an impressive track record, robust risk-management policies, and sound investment quality are also considered positives, according to the rating agency.

Moody's said that these strengths were tempered by factors affecting the life insurance operations including weak statutory earnings, products including long-term care and institutional spread business that have relatively high risk and volatility characteristics, pressure on statutory earnings and capital, below average capital/assets ratio, and an increasingly competitive market in wealth accumulation and wealth protection products.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.