Genworth Holdings Inc., a direct subsidiary of
Genworth Financial Inc.
), has priced the offering of its $400 million senior notes.
The company is offering the notes that carry a coupon rate of
4.8% per year and are scheduled to mature in 2024. The notes are
guaranteed by Genworth.
As government-sponsored and government-owned enterprises are
expected to raise the required capital balance of a company for
it to qualify as a mortgage insurer, Genworth intends to deploy
the net proceeds to capitalize one or more of its U.S. mortgage
insurance subsidiaries. Alternatively, the company may also use
the net proceeds for corporate purposes.
The rating agency Moody's Investors Service of
) assigned a senior debt rating of "Baa3" with a stable outlook
to the new notes issued by Genworth.
Along with the public offering, Genworth is also focused on
deleveraging its balance sheet. Recently, the company sold its
wealth management business to make payments for the near-term
As of Sep 30, 2013, the debt-to-capital ratio for Genworth was
0.23x, which increased 200 basis points (bps) from the 2012-end
level. With the current issuance of $400 million notes, the same
is expected to increase by another 200 bps to 0.25x.
Though the new issuance will increase the debt level, the
company remains focused to deleverage its balance sheet. The
proceeds from the divesture of its wealth management business
were utilized to pay down the near-term debt maturities.
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The new issuance is also expected to push interest expense of
Genworth higher that had inched down 1.6% year over year to $124
million in the third quarter of 2013. Nonetheless, Genworth's
solid operational performance generates enough funds to service
Among others in the life insurance industry, in Jul 2013,
American Equity Investment Life
) offered 6.625% senior unsecured notes worth $400 million with
maturity scheduled on Jul 15, 2021.
Recently in the financial sector, XLIT Ltd., a subsidiary of
XL Group plc
) has priced the offering of its $600 million senior notes.
A.M. Best Co. assigned a debt rating of "bbb" with a positive
Genworth presently carries a Zacks Rank #3 (Hold).