Fitch Ratings say players in the credit default swap (CDS) market are acting as if they are cooler toward a major issuer of long-term care insurance (LTCI).
Fitch says the CDS market is now acting as if the players think Genworth Financial Inc. (NYSE:GNW) should have a credit rating of BB plus, down from BBB minus earlier in the year.
The CDS market gives participants the ability to make investments tied to the likelihood that a credit user will or will not default on its obligations. CDS market players assume a strong issuer will pay an interest rate close to the rate the U.S. government would pay, and that the spread between the issuer's rate and the comparable Treasury rate will be wider for a weaker issuer.
