What You Need to Know
- Genworth Financial is moving toward selling a stake in its mortgage insurance business through an IPO.
- Genworth Mortgage Holdings works with about 1,800 mortgage lenders, including 19 of the 20 biggest mortgage loan originators.
- The prospectus lists the COVID-19 pandemic as well as its parent's LTCI business as risk factors.
Genworth Financial Inc. has started filing the paperwork to sell a stake in its mortgage insurance business to public investors through an initial public offering.
A “red herring,” or preliminary prospectus, for the IPO shows that Genworth Mortgage Holdings Inc. would be based in Raleigh, North Carolina, and could have stock that would trade on the Nasdaq Global Select Market.
The size of the offering, the anticipated share price and the stock symbol are not yet available.
Genworth Mortgage Holdings has been in the private mortgage insurance business since 1981, and it now operates in all 50 states and the District of Columbia, according to the preliminary prospectus.
The mortgage insurance business works with about 1,800 mortgage lenders, including 19 of the 20 biggest mortgage loan originators.
It produced $370 million in net income for 2020 on $1.1 billion, down from $677 million in net income on $979 million in revenue for 2019.
COVID-19 Risk Factor
One risk factor listed in the prospectus is the COVID-19 pandemic.
Genworth Financial, the Richmond, Virginia-based parent company, has been a larger issuer of life insurance and annuities, and a leader in the private long-term care insurance market.
The LTCI business has suffered from the effects of inaccurate assumptions about interest rates and policyholder behavior.
COVID-19 has helped the LTCI business, at least in the short term, by sharply reducing use of paid long-term care services.