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A.M. Best Assigns Debt Rating To Genworth Financial, Inc.’s New Senior Notes

Stocks in this article: GNW

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.

Copyright © 2013 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.



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