Genworth Financial Inc. is offering to pay its debt holders to accept changes in its business strategy.
Genworth is also taking other actions, such as sending new information to regulators, due to changes in efforts by China Oceanwide Holdings Group Co. Ltd. to acquire Genworth.
Genworth is a Richmond, Virginia-based company that has been a major issuer of life insurance and annuities and is still an issuer of long-term care insurance (LTCI).
China Oceanwide is a Beijing-based real estate development and financial services company.
China Oceanwide agreed to acquire Genworth for $2.7 billion in October 2016. Since then, the companies have head to push the deal completion deadline back several times due to regulatory approval delays.
Genworth has also pulled back from proposed efforts to separate Genworth Life and Annuity Insurance Company (GLAIC) — a unit that has focused on selling annuities GLIC) — from Genworth Life Insurance Company (GLIC) — a unit that has focused mainly on selling long-term care insurance, due to disagreements with regulators in Delaware about the value of GLAIC.
Genworth says one of its subsidiaries, Genworth Holdings Inc., has begun asking holders of its senior notes for their consent to change the terms of the notes.
Genworth Holdings is offering the note holders $2.50 per $1,000 in principal as a “consent fee.”
Under the current terms of the notes, Genworth can exclude a regulatory action directed at certain subsidiaries as a bankruptcy, insolvency or similar event of default, for purposes of its relationship with the note holders. Genworth now wants to put GLAIC on the list of subsidiaries for which a regulatory action would not count as a default event.
Genworth is making that change because of the decision to suspend efforts to “unstack” GLAIC from GLIC, the company says in documents filed with the U.S. Securities and Exchange Commission.
Genworth does not anticipate that GLAIC will be the target of such a regulatory action, the company says.