Genworth Could Sell Non-U.S. Mortgage Units If Term Loan Efforts Fall Through

In the new SEC filing, Genworth says it now hopes to get a $400 million term loan from a syndicate, or group, of lenders.

"However, there can be no assurance that syndication of the term loan will be successful, that we will be able to obtain the term loan under the terms that we currently pursue, or on terms satisfactory to us, or that we will ultimately enter into the term loan," Genworth says in a discussion of risks related to liquidity and credit.

Genworth is also considering other strategies for protecting the ratings of its U.S. mortgage insurance business, such as a partial sale, if the transaction with China Oceanwide cannot be completed.

In a table summarizing the company's liability for future policy and contract claims, Genworth says it now estimates that it ended 2017 with $9.6 billion in future claim obligations, up from $9.3 billion a year earlier.

• Projected LTCI obligations increased to $8.5 billion, from $8 billion.
• Projected life insurance obligations increased to $244 million, from $226 million.
• Projected fixed annuity obligations increased to $24 million, from $16 million.

Elsewhere in the section on future policy obligations, Genworth notes  that it could face risks related to future life insurance benefits obligations as well as future LTCI benefits obligations.

If, for example, LTCI claim costs for an acquired block of LTCI policies turned out to be 5% higher than expected, that could cost the company an extra $160 million.

If the lapse rate at the company's own block of in-force term life and whole life policies increased to a level 10% higher than expected, that could increase costs by $400 million.

— Read Genworth Asks to Change Terms of Notes on ThinkAdvisor.

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