The initial public offering for Genworth Financial's mortgage insurance subsidiary could raise over $623 million in proceeds, all of which are going to its parent company.
Furthermore, as part of the IPO, Genworth Mortgage Holdings is being rebranded as Enact Holdings. While the registration statement filed with the Securities and Exchange Commission still refers to the various operating units using the Genworth name, those will also be rebranded as Enact as soon as the company receives approval from state regulators.
The offering looks to sell nearly 22.6 million shares, along with an underwriters' option of 3.4 million shares in an expected price range of between $20 and $24 per share. However, recently completed IPOs in the mortgage industry — from
In addition to the IPO, Genworth Financial is selling 4 million Enact shares to affiliates of
Genworth Financial will retain approximately 80% of Enact's stock following the offering's completion. During Genworth's
On Tuesday morning, Genworth Financial opened 2 cents lower than its previous close at $4.36 per share and then fell as low as $4.28 per share before coming back to $4.32 at 3 p.m.
The news seemed to negatively affect trading for three of the other four standalone mortgage insurers at deadline. Essent Group took a hit, down 40 cents a share from its previous close to $52.33 per share, while Radian Group was down 15 cents per share to $24.57. MGIC Investment’s stock price declined 5 cents to $15.30 per share. NMI Holdings, on the other hand, was up 7 cents per share to $26.12. The parent of the other private MI firm, multiline company Arch Capital Group, was up 1 cent per share to $40.14.
In 2020, Genworth Mortgage Holdings reported net income of $370.4 million, down from $677.6 million for 2019 and $453.6 million in 2018, the registration statement disclosed. The 2020 results were impacted by increased loss reserves related to COVID-19. That was despite the fact that Genworth's new insurance written totaled $99.9 billion for the year, compared with $62.4 billion in 2019 and $40 billion in 2018.
If the IPO takes place, it brings the mortgage insurance unit's saga full circle. On May 25, 2004, General Electric spun out what was then called GE Mortgage Insurance Co.,