Firm will continue to "evaluate options as market conditions develop"
Genworth Financial has announced that the planned initial public offering of its mortgage insurance unit, Enact Holdings (formerly Genworth Mortgage Insurance), has been postponed. The Raleigh-based insurer cited trading vitality as the reason behind the delay.
"In light of the recent significant trading volatility in the mortgage insurance (MI) sector, Genworth's board of directors determined that current market pricing for the planned offering does not accurately reflect Enact's value. Therefore, we have decided to postpone the IPO and will continue to evaluate our options as market conditions develop," said Genworth President and CEO Tom McInerney.
The IPO, announced just a week ago, was part of Genworth Financial's contingency plan to improve its liquidity. Net proceeds from the offering will go to Genworth Holdings, the firm's selling stockholder. However, Genworth Financial said on Thursday that its "liquidity position to meet near-term obligations is not dependent on the IPO," with the holding company having approximately $757 million in cash and liquid assets at the end of the first quarter.
"Our primary objective has been and will continue to be protecting the value of Enact. We maintain our positive long-term outlook for the MI sector, given strong trends in the US housing market and expected tailwinds as the economy recovers from COVID-19," McInerney said.