A.M. Best Assigns Preferred Stock and Debt Ratings, Affirms Financial Strength Ratings Following Initial Public Offering of Genworth Financial, Inc.
OLDWICK, N.J.--(BUSINESS WIRE)--May 25, 2004
A.M. Best Co. has assigned a rating of "bbb" to the preferred stock offering and "a-" to the senior debt related to the company's issuance of equity units of Genworth Financial, Inc. (Genworth) (NYSE: GNW) (Richmond, VA). Genworth is the new brand name of substantially all of GE's former life and mortgage businesses that went public on May 25, 2004. GE still maintains a majority ownership of the organization. A.M. Best has also assigned a financial strength rating of A+ (Superior) to River Lake Insurance Company, a wholly-owned subsidiary of Genworth that funds XXX reserves for term policies issued by Genworth companies. All of the financial strength ratings of Genworth's other operating insurance companies have been affirmed. The preferred stock, debt and financial strength ratings all have stable outlooks. (See list below.)
Execution of the transaction and the business plan as envisioned presents a number of strategic benefits to Genworth. Most importantly, a significant source of new capital for its insurance operations now exists. Further, a greater strategic focus on those operations is provided, as its goals had become increasingly divergent from its parent's, and the competition for financial and other resources between Genworth and GE's other enterprises has been lessened.
A.M. Best believes that Genworth's new balance sheet has a manageable amount of leverage that can comfortably be serviced from the earnings generated by its operating insurance companies. It plans to operate at a level of debt-to-capital below 25%.
Genworth's brand has been established to ultimately provide it with an identity independent from its parent, while linking it to GE's heritage in order to benefit from existing awareness of its parent while this new brand achieves greater market awareness.
A.M. Best has assigned a debt rating of "bbb" on the $100 million preferred stock and "a-" on the $600 million senior debt related to the equity units of Genworth Financial, Inc.
The financial strength rating of A+ (Superior) has been assigned to River Lake Insurance Company, a subsidiary of Genworth Financial, Inc.
The financial strength rating of A+ (Superior) has been affirmed for the following subsidiaries of Genworth Financial, Inc.:
-- American Mayflower Life Insurance Company of New York
-- Federal Home Life Insurance Company
-- First Colony Life Insurance Company
-- GE Capital Life Assurance Company of New York
-- GE Life and Annuity Assurance Company
-- General Electric Capital Assurance Company
The financial strength rating of A (Excellent) has been affirmed for the following subsidiaries of Genworth Financial, Inc.:
-- GE Group Life Assurance Company
-- Professional Insurance Company
A.M. Best Co., established in 1899, is the world's oldest and most authoritative insurance rating and information source. For more information, visit A.M. Best's Web site at www.ambest.com.
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|Date:||May 25, 2004|
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