Moody's has downgraded Genworth Holdings Inc.'s senior unsecured debt to B2 from Ba3.
The rating agency also downgraded the insurance financial strength ratings of Genworth Life Insurance Co. and Genworth Life Insurance Co. of New York to B2 from Ba3, and the insurance financial strength rating of Genworth Life & Annuity Insurance Co. to Ba1 from Baa2.
The ratings on Genworth's Australia- and Canada-based mortgage insurance units remain unaffected and unchanged, Moody's said.
These actions follow the announcement by Genworth Holdings' parent company, Genworth Financial Inc., that it intends to refile its application with the Committee on Foreign Investment in the U.S. and evaluate options to address its upcoming debt maturities in the event that the transaction with China Oceanwide Holdings Group Co. Ltd. is not completed.
The ratings downgrade and continued review for downgrade of Genworth Holdings and its life insurance subsidiaries are driven by continuing delays in obtaining required regulatory approvals for the planned acquisition of the company by China Oceanwide. The downgrade also reflects the need to develop alternative arrangements, in case the transaction does not materialize, Moody's said.
The ratings downgrade and the continued review for downgrade of Genworth Life Insurance and its subsidiary Genworth Life and Annuity Insurance reflect both the uncertain financial flexibility at Genworth and the continued concern about the tail risk associated with the long-term care business in Genworth Life Insurance.