A.M. Best Co. has assigned a debt rating of “bbb” to the $400
million 4.8% 10-year senior unsecured notes recently issued by
Genworth Holdings, Inc. (GHI). The notes are guaranteed by GHI’s
parent holding company, Genworth Financial, Inc. (Genworth)
[NYSE: GNW]. The assigned outlook is stable. The existing financial
strength, issuer credit and debt ratings of Genworth, GHI and its
domestic life/health insurance companies (all headquartered in Richmond,
VA) are unchanged.
GHI intends to use the net proceeds from this issuance to make a capital
contribution to one or more of the U.S. mortgage insurance subsidiaries
of Genworth to satisfy all or a part of the higher capital requirements
expected to be imposed by government-sponsored enterprises as a part of
the anticipated revisions to their eligibility standards for qualifying
mortgage insurers. If all of the proceeds are not required for the
expected uses, or Genworth otherwise decides not to use them for those
purposes, the net proceeds will be used for general corporate purposes.
GHI maintains interest coverage in excess of 2.5 times and adjusted (for
equity credit on hybrid securities) debt to capital of approximately
25%, including the new $400 million senior notes.
A.M. Best notes that although financial leverage has increased
moderately, GHI has previously prefunded its June 2014 scheduled
maturity, which will reduce leverage in the near term. Following that
payment, the next scheduled debt maturity is in November 2016.
The methodology used in determining these ratings is Best’s Credit
Rating Methodology, which provides a comprehensive explanation of A.M.
Best’s rating process and contains the different rating criteria
employed in the rating process. Best’s Credit Rating Methodology can be
found at www.ambest.com/ratings/methodology.
A.M. Best Company is the world's oldest and most authoritative
insurance rating and information source. For more information, visit www.ambest.com.
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Copyright Business Wire 2013