Genworth Financial Inc. has filed a copy of its $450 million term loan credit agreement with the U.S. Securities and Exchange Commission.
The Richmond, Virginia-based insurer said in February that it hoped to use its stake in its Canadian mortgage insurance as collateral for a $450 million senior term loan. The company gave little information about the nature of the loan it actually received last week, when it announced that it had succeeded at getting the loan from a group of investors.
(Related: Genworth Gets $450 Million Term Loan)
Genworth has been a major issuer of life insurance, annuities and long-term care insurance (LTCI) in the United States, and it continues to be a major player in the U.S., Canadian and Australian mortgage insurance markets.
The credit agreement shows that Genworth did use its stake in the Canadian mortgage insurance operation as the collateral.
The agreement caps Genworth’s maximum ratio of debt to capital at 35%, and it requires the Canadian mortgage insurance operation to have at least 155% of the minimum required level of capital.
The maximum ratio of the loan amount to the collateral value is 50%.
The agreement does not show what the current ratios are.
The agreement also shows that Genworth may have to pay its lenders back early if it gets a large amount of cash or sells a major unit. The parties agree in the definitions, however, that, if China Oceanwide Holdings Group Co. Ltd. or a China Oceanwide unit succeeds at acquiring Genworth, that would not constitute a change of control of Genworth.
In the agreement, the parties state that the China Oceanwide entities that are involved with the Genworth deal are Asia Pacific Global Capital Co. Ltd. of China and Asia Pacific Global Capital USA Corp. of Delaware.
The credit agreement also lists Genworth’s other lien holders.
The list shows that Genworth has leased computers, through an office in Richmond, from a unit of Dell; audio visual systems, through an office in Concord, California, from Avidex Industries L.L.C.; and photocopiers, printers, fax machines, video conferencing systems, and other systems, through an office in Canada, from Ricoh.
In a list of other commitments, the parties say Genworth has promised to spend $175 million to “facilitate the separation and isolation of the long term care business” by unstacking the unit that wrote the LTCI coverage from the unit that wrote life and annuity products.
A copy of the credit agreement is available here.
— Read 5 Things Genworth Executives Told Wall Street on ThinkAdvisor.