Genworth Files to Sell Minority Stake in Canadian Mortgage Insurance Operations

Mon. June 01, 2009; Posted: 02:14 PM

RICHMOND, Va., Jun 01, 2009 (A. M. Best via COMTEX) -- GNW | Quote | Chart | News | PowerRating -- Genworth Financial Inc. has filed a preliminary prospectus with Canadian securities administrators for an initial public offering of up to 49% of its Canadian mortgage insurance operations.

The IPO is expected to be completed in the third quarter of 2009, the company said in a statement. The company said it plans to retain majority ownership of the business "for the foreseeable future."

The previously announced sale of a minority stake in the Canadian operations will provide Genworth with ?additional financial flexibility,? Michael D. Fraizer, chairman and chief executive, said in the statement.

Earlier this year Genworth Financial (NYSE: GNW | Quote | Chart | News | PowerRating) missed a U.S. Treasury Department deadline to receive funding through the department's Capital Purchase Program (BestWire, April 10, 2009).

In February, Genworth reported a loss from continuing operations for the fourth quarter of 2008 of $321 million, with operating losses in its U.S. mortgage insurance unit widening to $114 million from a $3 million loss in the fourth quarter of 2007 (BestWire, March 6, 2009).

Genworth Life & Annuity Insurance Co. currently has a Best's Financial Strength Rating of A (Excellent).

The top five writers of mortgage guaranty insurance in the United States, according to BestLink, are: Mortgage Guaranty Group, with a 25.7% market share; PMI Mortgage Group, 14.7%; Radian Group, 14.5%; American International Group Inc., with 14.1%; and Genworth PC Group, with 13.4%.

Shares of Genworth Financial Inc. were $6.51 in afternoon trading on June 1, up 10% from the previous close.

(By Alyn Ackermann, senior associate editor, BestWeek: Alyn.Ackermann@ambest.com)

For full details on Genworth Financial (GNW) click here. Genworth Financial (GNW) has Short Term PowerRatings of 5. Details on Genworth Financial (GNW) Short Term PowerRatings is available at This Link.

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