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May 21, 2004 at 08:00 PM
NU Online News Service, May 21, 2004, 2:26 p.m. EDT – Moody’s Investors Service, New York, says Genworth Financial Inc., Richmond, Va., is a good company that faces pressure on earnings.[@@]
General Electric Company, Fairfield, Conn., wants to spin off Genworth, a unit that sells life insurance, mortgages and other products and services, as a separate company through a public offering later this year.
Moody’s has assigned an A2 rating to a proposed offering of $600 million in “equity units” and a Baa1 rating to a proposed offering of $100 million in preferred stock.
Each equity unit will consist of an equity-purchase contract and an ownership interest in a 2.5% senior note due May 16, 2009. Moody’s plans to treat the 24 million equity units as if they were 75% stock and 25% debt.
The preferred stock is “mandatorily redeemable” in 2011. Moody’s is treating the preferred stock as if it were 100% debt.
The Genworth life and mortgage units have strong management teams, strong market positions, solid risk-management policies, good distribution systems and sound investment quality, Moody’s says.
