Richmond, Va. — Genworth Financial Inc. announced it has borrowed $930 million of the $1.7 billion available to the company under its two revolving credit facilities that mature in 2012. The company intends to use the borrowings, along with other sources of liquidity, for the repayment of outstanding holding company debt (including the Genworth's senior notes maturing in 2009) at maturity and/or the purchase and retirement of outstanding debt prior to maturity or for other general corporate purposes.
After the maturity of the 2009 notes, Genworth Financial has no additional long-term debt maturing until 2011, when notes and preferred stock totaling $694 million are due.
"Accessing the credit facility to position us in retiring our 2009 debt maturities is an important step to navigate today's difficult capital market conditions," says Michael Fraizer, chairman and CEO. "Genworth remains focused on enhancing capital flexibility through reinsurance and other strategic actions, and positioning the company effectively while we serve our policyholders and distributors every day."
Of the $930 million borrowed, $465 million was borrowed under the Genworth's amended and restated five-year credit agreement, dated as of August 13, 2007 (the "2007 Credit Agreement"), and $465 million was borrowed under the company's amended and restated five-year credit agreement, dated as of May 25, 2006 (the "2006 Credit Agreement").
In accordance with the terms of the Credit Agreements, the Company intends to convert the interest rate on the borrowings to a LIBOR-based rate shortly.
In its third quarter earnings release, Genworth stated that at the insurance company operating level, the company maintained approximately $6.2 billion in cash and cash equivalents. The company also stated that its life insurance risk-based capital levels were estimated to be approximately 360% as of Sept. 30, 2008, following the contribution of $500 million from the holding company effective as of that date.
Reinsurance and capital efficiency projects providing capital benefits of approximately $750 million were completed in the third quarter, with an additional $115 million completed since the end of the quarter. There is an additional $500 million of reinsurance and other capital projects targeted for completion by year end. In its quarterly release, the company also announced other strategies aimed at providing additional capital flexibility.
Sources: PR Newswire, Genworth Financial
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