(The following statement was released by the rating agency)
Oct 11 - Standard & Poor's Ratings Services said today that its 'AA-'financial strength rating and 'A-' issuer credit rating on Genworth FinancialMortgage Insurance Co. Canada and Genworth MI Canada Inc.
, respectively(collectively referred to as Genworth Canada), and the stable outlook on theseratings are unaffected by the recent downgrade of their ultimate parent andmajority shareholder, Genworth Financial Inc.
(GNW) to BBB-/Negative/A-3from BBB/Negative/A-2. The ratings on the Genworth U.S. life insurance companieswere also affected by these actions (for details see "Genworth Financial Inc.Downgraded To 'BBB-'; Outlook Negative", published Oct 11, 2012, onRatingsDirect on the Global Credit Portal).
Although Genworth Canada is part of the GNW group, we consider there to benegligible links between the creditworthiness of GNW and Genworth Canada. Weconsider Genworth Canada to be non-strategically important to GNW.Accordingly, we attribute no support to the stand-alone credit rating onGenworth Canada from GNW. We are cognizant of the influence GNW has on itsCanadian operations as a majority shareholder but, in our view, GenworthCanada has some protection against financial deterioration at the group level,aided by prudential supervision by the Office of the Superintendent ofFinancial Institutions, presence of independent directors on the boards ofboth the Canadian operating company and publicly listed holding company, andsenior management/boards' recognition of the necessity of a financially strongentity in order to operate in the Canadian market, considering that the maincompetitor and largest player, Canada Mortgage and Housing Corp.(AAA/Stable/A-1+), is a highly rated federal government-owned entity. In thenormal course of business, we expect Genworth Canada to return capitalincluding payout of dividends. However, if the level of return of excesscapital, in our view, hinders the company's very strong capitalization, theratings could come under pressure.
(New York Ratings Team)