Moody’s Investors Service has lowered the ratings it has assigned to large financial services companies and its main life insurance subsidiaries.
Moody’s, New York, cut the debt rating of Genworth Financial Inc., Richmond, Va., to Baa1, from A2, and the insurance financial strength ratings assigned to the Genworth life insurance units to A1, from Aa3.
Moody’s says the outlook on Genworth and the Genworth life insurance subsidiaries is negative.
“The downgrade of the life insurance operations and the negative outlook reflect the continuing adverse impact of the difficult credit and economic environment on Genworth’s earnings, challenges in managing capital and life insurance related collateral needs to support the company’s growth, and diminished financial flexibility at the holding company,” says Scott Robinson, a Moody’s vice president.
The rating action follows Genworth’s announcement of its third-quarter results, which included a loss of $258 million and $478 million in net investment losses.
The downgrade affects about $4.2 billion in debt.
In late trading today, Genworth’s stock was selling for $1.22 a share, down from $2.72 at Monday’s close and down from about $28 a year ago.