Genworth (GNW) U.S. Mortgage Insurance Capital Plan Approved, Implemented

April 1, 2013 8:23 AM EDT
Genworth Financial, Inc. (NYSE: GNW) announces the comprehensive U.S. Mortgage Insurance capital plan has received all necessary approvals and been fully implemented as of April 1, 2013. The capital plan, announced on January 16, 2013, consisted of several actions including transferring ownership of the European mortgage insurance subsidiaries to Genworth Mortgage Insurance Corporation (GMICO) that was completed on January 31, 2013 and implementing an internal legal entity reorganization which created a new public holding company structure that removes the U.S. mortgage insurance subsidiaries from the companies covered by the indenture governing Genworth's senior notes that was completed on April 1, 2013.

Cash and highly liquid securities held by the holding company[1] are estimated to be approximately $950 million as of March 31, 2013. Subsequently, as part of the comprehensive capital plan, Genworth contributed $100 million to GMICO on April 1, 2013. The company continues to expect to maintain holding company cash and highly liquid securities balances of two times its annual debt service expense plus a $350 million buffer.

Also, as part of the plan, Genworth continues to have the future option, under certain adverse conditions, should they occur, to implement a "NewCo" type structure, for the continued writing of new business in all 50 states. The company anticipates the risk-to-capital ratio of our flagship writer, GMICO, will be reduced by approximately 15 points and the combined risk-to-capital ratio of the U.S. mortgage insurance subsidiaries will be reduced by approximately 10 points from this plan.

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