FINANCIAL INSTITUTIONSISSUER COMMENT 12 MAY 2015GENWORTH HOLDINGS, INC. (GNW)Moodys Senior Unsecured Rating Ba1Moodys Outlook NEGBond-Implied Rating B2CDS-Implied Rating B3EDF-Implied Rating Caa1As of 05/11/2015ANALYST CONTACTSAllerton G. Smith 212-553-4058 Sr Dir-Sr Research Analyst allerton.smith@moodys.comABOUT CAPITAL MARKETS RESEARCHAnalyses from Moodys Capital Markets Research, Inc. (CMR) focus on explaining signals from the credit and equity markets. The publications address whether market signals, in the opinion of the groups analysts, accurately reflect the risks and investment opportunities associated with issuers and sectors. CMR research thus complements the fundamentally-oriented research offered by Moodys Investors Service (MIS), the rating agency.CMR is part of Moodys Analytics, which is one of the two operating businesses of Moodys Corporation. Moodys Analytics (including CMR) is legally and organizationally separated from Moodys Investors Service and operates on an arms length basis from the ratings business. CMR does not provide investment advisory services or products.View the CMR FAQ Contact the CMR team Follow us on TwitterMoodys Analytics markets and distributes all Moodys Capital Markets Research, Inc. materials. Moodys Capital Markets Research, Inc. is a subsidiary of Moodys Corporation. Moodys Analytics does not provide investment advisory services or products. For further detail, please see the last page.Market Signals ReviewGenworth: All Three Market-Implied Ratings Remain Weak The bond-, CDS-, and EDF'-implied ratings for Genworth have all retreated. The drop followed the company's November 6, 2014 announcement of a quarterly loss of $844 million, fueled by a pre-tax reserve charge of $531 million that is related to its long-term care insurance operations.Indicating that the market gave a tepid response to Genworth managements restructuring initiatives announced on April 29, each market implied-rating is at the same level it was 30 days ago (discussed below).FIGURE 1. GENWORTH: MOODYS AND MARKET-IMPLIED RATINGS, LAST SINCE NOVEMBER 1, 2014 (DAILY DATA)MOODY'S ANALYTICS FINANCIAL INSTITUTIONS2 12 MAY 2015 MARKET SIGNALS REVIEW : GENWORTH: ALL THREE MARKET-IMPLIED RATINGS REMAIN WEAKThe CDS-implied rating moved down by five notches from Ba1 on November 1 to B3 (Figure 1). It reached a five-year low point of Caa2 in January.The bond-implied rating also fell by five notches, from Baa3 on November 1 to B2. It fell to B3 in January 2015, the lowest level observed over the last five years.The EDF'-implied rating deteriorated from B3 on November 1, 2014 to Caa1, a level it had not plumbed since December 2012. Its five-year low point was Caa3 in September 2011.According to our ratings gap-conditioned transition matrices, companies rated Ba1 with a bond-implied rating of B2 outperformed the broad market 54% of the time over the following 12 months, matched the markets per...
