Genworth Financial, Inc. (NYSE: GNW) declined Friday after S&P lowered its long-term counter-party credit and senior unsecured debt ratings to 'BB+' from 'BBB-'.

It also lowered our financial strength ratings on Genworth Life Insurance Co., Genworth Life and Annuity Insurance Co., and Genworth Life Insurance Co. of New York to 'BBB+' from 'A-'. The outlook is negative.

"We are disappointed that certain rating agencies took negative actions regarding our ratings at this time," said Tom McInerney, President and CEO. "We have solid capital positions across all of our businesses and strong liquidity at the holding company, and we are working on actions to improve capital, financial flexibility, and earnings over time. We remain sharply focused on building shareholder value."

Genworth ended the third quarter with approximately $1.1 billion of cash and liquid assets at the holding company, a buffer of $720 million in excess of one and a half times annual debt service. The company believes the near term impact from these ratings or outlook changes will have minimal impact on the holding company, although future borrowing costs are likely to increase, and the holding company has no debt maturities until 2016. These changes in ratings or outlook are expected to reduce sales in some of its products. Additionally, the company currently intends that its U.S. mortgage insurance business will meet the additional capital requirements contained in the private mortgage insurer eligibility requirements by the anticipated effective date of June 30, 2015, primarily through reinsurance (or similar) transactions, together with cash available at the holding company.

Genworth continues to work with the rating agencies on their rating evaluation of the company and has announced it will be taking a number of steps to build capital and improve statutory earnings, including pursuing additional LTC premium rate actions, seeking opportunities to reduce or capitate risk in legacy LTC blocks and adjusting its sales mix. In addition, it is exploring block transactions and expanding the company's use of reinsurance.