Genworth Financial Inc.

The negative CreditWatch placement on the parent holding company, GNW, reflects liquidity risks due to near-term debt maturities. The negative CreditWatch placement on GMICO reflects pressure on the group credit profile from a combination of potentially higher debt load and stressed economic conditions straining capital and earnings, as well as any negative influence under new ownership. S&P Global Ratings expects to provide an update in the near term as these events develop. We would likely lower the rating on GNW by one or more notches if we believe the company will not get access to additional resources to meet its pending obligations in 2021. We could also lower the ratings on GMICO if: We do not expect the consolidated fixed-charge

...Genworth Financial Inc. (NYSE: GNW) is facing significant liquidity constraints. About $1.0 billion of debt maturities are due in February and September 2021. A portion of the recent debt issuance of $750 million through its U.S. mortgage insurance business will help to service the February 2021 debt maturity, but we believe the available funds would likely be insufficient to service the September 2021 debt maturity. At Sept. 30, 2020, holding company cash was $814 million, which includes a portion of the recent debt issuance. Uncertainty on acquisition by China Oceanwide Holdings Group Co. Ltd. (Oceanwide) remains. The merger agreement was extended till Nov. 30 for the 16th time. The recent update from Genworth indicates its satisfaction at the progress made by Oceanwide on funding. Post close, Genworth expects Oceanwide to provide $1.5 billion in capital infusion to ease liquidity issues and reduce leverage. Economic uncertainty and high unemployment will produce higher credit losses...

Full Report