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Genworth Holdings Announces Senior Notes Offering

RICHMOND, Va., Dec. 5, 2013 /PRNewswire/ -- Genworth Holdings, Inc., a direct subsidiary of Genworth Financial, Inc. (NYSE: GNW), today announced that it has commenced a public offering of senior notes due 2024. The notes will be fully and unconditionally guaranteed on an unsecured and unsubordinated basis by Genworth Financial, Inc. 

We currently expect to use the net proceeds from this offering (to the extent needed) to make a capital contribution to one or more of our U.S. mortgage insurance subsidiaries to satisfy all or a part of the higher capital requirements expected to be imposed by government-owned and government-sponsored enterprises as a part of the anticipated revisions to their eligibility standards for qualifying mortgage insurers.  We cannot be sure when the GSEs will announce their new eligibility standards or what the terms (including required capital levels) will be. We believe our U.S. mortgage insurance business is currently writing profitable new business with attractive returns.

In the event the capital requirements from the new eligibility standards exceed the net proceeds raised in this offering, we will consider a variety of funding options, including executing reinsurance transactions in our U.S. mortgage insurance business that provide capital benefits, using proceeds from the proposed partial initial public offering of our Australia mortgage insurance business, using cash at Genworth Holdings in excess of our targets, using available deferred tax assets, using proceeds from the issuance of new debt or equity securities (including convertible, exchangeable or other hybrid securities) at the Genworth Financial and/or Genworth Holdings level, and/or using proceeds from a third-party capital raise by our U.S. mortgage insurance subsidiaries or earnings growth from those subsidiaries. To the extent all of the proceeds are not required for the expected uses, or we otherwise decide not to use them for those purposes, the net proceeds will be used for general corporate purposes. Pending the expected uses, we may invest the net proceeds in short-term, liquid obligations.

Although we will incur additional debt in this offering, we have been working to reduce our leverage through actions such as those recently taken, including designating proceeds from the sale of our wealth management business to address near term debt maturities.  Subsequent to this offering, we will continue to focus on improving the operating performance of our businesses and reducing leverage over the medium-term.

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