Research Update: Genworth Financial Inc. Remains On Watch Developing On Pending Acquisition By China Oceanwide

Genworth Financial Inc. (NYSE: GNW) has announced an agreement with Brookfield Business Partners for Brookfield to purchase Genworth's majority interest in Genworth MI Canada Inc. (TSX: MIC). The proceeds of the sale will help Genworth address its 2020 debt maturities. Although it loses a consistent source of earnings, anticipated dividends from its U.S. mortgage operations (Genworth Mortgage Insurance Corp.; GMICO) and Australian mortgage business, and remaining sale proceeds should mitigate near-term debt serviceability pressures. While GMICO's improving earnings help, Genworth remains challenged by a heavy debt burden and by weakness in its long-term care (LTC) business, which strains its credit profile. Our ratings on GNW and GMICO remain on CreditWatch with developing implications, reflecting the continued uncertainty regarding the finality

...- Genworth Financial Inc. (NYSE: GNW) has announced an agreement with Brookfield Business Partners for Brookfield to purchase Genworth's majority interest in Genworth MI Canada Inc. (TSX: MIC). - The proceeds of the sale will help Genworth address its 2020 debt maturities. Although it loses a consistent source of earnings, anticipated dividends from its U.S. mortgage operations (Genworth Mortgage Insurance Corp.; GMICO) and Australian mortgage business, and remaining sale proceeds should mitigate near-term debt serviceability pressures. - While GMICO's improving earnings help, Genworth remains challenged by a heavy debt burden and by weakness in its long-term care (LTC) business, which strains its credit profile. - Our ratings on GNW and GMICO remain on CreditWatch with developing implications, reflecting the continued uncertainty regarding the finality of the acquisition by China Oceanwide Holdings Group Co. Ltd....

Research Update