Genworth Mulls Restructuring (GNW) (MET) (PRU)

Zacks

Genworth Life and Annuity Insurance Company, a wholly-owned indirect subsidiary of Genworth Financial, Inc. (GNW) announced that it is considering restructuring the life insurance policies currently reinsured to River Lake Insurance Company III (“RLIII”). RLIII is a special purpose financial captive subsidiary of Genworth Life and Annuity Insurance Company.

Pursuant to the restructuring, Genworth requires consent from the Virginia Bureau of Insurance to recall the policies reinsured to RLIII. As such, it had requested the Virginia Bureau of Insurance for approval.

The restructuring includes acquiring the issued and outstanding INC Money Market Securities and INC Term Securities, supported by surplus notes from RLIII, through a cash tender offer by Genworth Life Insurance Company.

The tender price will be much below the par value and Genworth Life Insurance Company will only carry out the tender provided there remains a considerable amount of those securities that are validly tendered.

However, if a considerable amount of securities cannot be tendered at a discount to par value, Genworth would continue with the present arrangement and halt the restructuring.

Genworth Financial reported a strong third quarter, beating the Zacks Consensus estimates as well as the year ago earnings largely on the back of better performance at Retirement & Protection.

The Zacks Consensus Estimate for fourth-quarter 2011 is 23 cents per share. For full years 2011 and 2012, the Zacks Consensus Estimates are, respectively, 48 cents per share and $1.32 per share.

The quantitative Zacks #4 Rank (short-term Sell rating) for the company indicates downward pressure on the stock over the near term.

Based in Richmond, Virginia, Genworth Financial offers a variety of products to customers in areas such as life insurance and lifestyle protection, long-term care insurance, annuities, asset management and mortgage insurance through financial intermediaries, advisors, independent distributors and sales specialists. The company competes with MetLife, Inc. (MET) and Prudential Financial, Inc. (PRU).

GENWORTH FINL (GNW): Free Stock Analysis Report

METLIFE INC (MET): Free Stock Analysis Report

PRUDENTIAL FINL (PRU): Free Stock Analysis Report

Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.

Be the first to comment

Leave a Reply