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A.M. Best Removes From Under Review With Developing Implications and Affirms Credit Ratings of Genworth Financial, Inc. and Its Affiliates

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A.M. Best has removed from under review with developing
implications and affirmed the Financial Strength Rating (FSR) of B+
(Good) and the Long-Term Issuer Credit Rating (Long-Term ICR) of "bbb-"
of Genworth Life and Annuity Insurance Company (GLAIC) (Richmond,
VA). Concurrently, A.M. Best has removed from under review with
developing implications and affirmed the FSR of B- (Fair) and the
Long-Term ICRs of "bb-" of Genworth Life Insurance Company (GLIC)
(Wilmington, DE) and Genworth Life Insurance Company of New York
(New York, NY). Additionally, A.M. Best has removed from under review
with developing implications and affirmed the Long-Term ICRs of "b" of Genworth
Financial, Inc.
(Genworth) (NYSE:GNW) and Genworth Holdings, Inc.
(both domiciled in Delaware), as well as their Long-Term Issue Credit
Ratings (Long-Term IR). The outlook assigned to these Credit Ratings
(ratings) is stable.

A.M. Best has removed the under review status on all existing Genworth
ratings based on its assessment of potential outcomes given the
successful completion of the Committee on Foreign Investment in the
United States process in June 2018. This represented a key step toward
the pending acquisition of Genworth by China Oceanwide. Other regulatory
regimes also need to approve the transaction. For now, Genworth
management has formulated adequate financial flexibility, given a
limited ability to access the public debt and equity markets.

Genworth addressed the May 2018 $600 million of senior debt with the
issuance of a $450 million senior secured term loan in March 2018. In
addition, the holding company maintains an adequate level of liquidity.
Also, cash flow from the domestic and international mortgage businesses
remains good.

The ratings of GLAIC reflect its balance sheet strength, which A.M. Best
categorizes as strong, as well as its marginal operating performance,
limited business profile and appropriate enterprise risk management
(ERM).

The ratings of GLIC reflect its balance sheet strength, which A.M. Best
categorizes as weak, as well as its marginal operating performance,
limited business profile and appropriate ERM.

GLIC's operations remain focused on the long-term care (LTC) market,
which A.M. Best has on its product continuum at the high end of risk.
A.M. Best continues to view GLIC's risk-adjusted capital level as weak,
as measured by Best's Capital Adequacy Ratio (BCAR), for year-end 2017.
The LTC block continues to rely solely on premium rate increases and
associated benefit reductions to prevent capital to further decline.
A.M. Best notes the company has been successful at securing rate
increases across its various LTC blocks, but operating performance
remains volatile, and with the limited product profile, prevents
meaningful organic capital growth. On the other hand, GLAIC's
risk-adjusted capital, as measured by BCAR, remains strong. However,
this has continued to give rise to marginal and volatile operating
performance with a limited business profile, reflective of the company's
decision to halt sales of its traditional life insurance and fixed
annuity products in 2016.

Given the information at hand, A.M. Best believes the successful closing
of a transaction with China Oceanwide will have neither a positive nor
negative impact on the ratings of Genworth. However, A.M. Best will
revisit that view when and if the transaction closes, and is presented
with additional plans and company intentions, including capital
contributions to any rated entities.

The following Long-Term IR has been assigned with a stable outlook:

Genworth Holdings, Inc. (guaranteed by Genworth Financial, Inc.)—
--
"b" on $450 million floating rate senior secured term loan, due 2023

The following Long-Term IRs have been removed from under review with
developing implications and affirmed with assigned outlooks of stable:

Genworth Holdings, Inc. (guaranteed by Genworth Financial, Inc.)—
--
"b" on $400 million 7.70% senior unsecured notes, due 2020
-- "b"
on $400 million 7.20% senior unsecured notes, due 2021
-- "b" on
$750 million 7.625% senior unsecured notes, due 2021
-- "b" on $400
million 4.9% senior unsecured notes, due 2023
-- "b" on $400
million 4.8% senior unsecured notes, due 2024
-- "b" on $300
million 6.50% senior unsecured notes, due 2034
-- "ccc+" on $600
million fixed/floating rate junior subordinated notes, due 2066

The following indicative Long-Term IRs on securities available under the
universal shelf registration have been removed from under review with
developing implications and affirmed with assigned outlooks of stable:

Genworth Financial Inc.
-- "b" on senior unsecured debt
--
"b-" on subordinated debt
-- "ccc+" on preferred stock

Genworth Holdings, Inc.
-- "b" on senior unsecured debt
--
"b-" on subordinated debt
-- "ccc+" on preferred stock

Genworth Global Funding Trusts—The program rating of "bbb-" has
been removed from under review with developing implications and
withdrawn, as the vehicle is empty.

This press release relates to Credit Ratings that have been published
on A.M. Best's website. For all rating information relating to the
release and pertinent disclosures, including details of the office
responsible for issuing each of the individual ratings referenced in
this release, please see A.M. Best's
Recent
Rating Activity
web page. For additional information
regarding the use and limitations of Credit Rating opinions, please view
Understanding
Best's Credit Ratings
. For information on the proper media
use of Best's Credit Ratings and A.M. Best press releases, please view
Guide
for Media - Proper Use of Best's Credit Ratings and A.M. Best Rating
Action Press Releases
.

A.M. Best is the world's oldest and most authoritative insurance
rating and information source. For more information, visit
www.ambest.com.

Copyright © 2018 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.

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