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Wednesday, January 16, 2013

Genworth separates U.S. MI unit, reduces bond default risk, (NYSE: GNW)

Genworth Financial Inc on Wednesday said it was reorganizing itself to separate its mortgage insurance business from the rest of the company, reducing the risk of default on its bonds and sending its shares up 9 percent.Genworth's shareholders -- including hedge fund Highfields Capital Management -- had been asking the company to take steps to insulate the loss-making mortgage business from the life and long-term care insurance business.Bond rating firm Moody's piled on the pressure in September when it said it would likely downgrade Genworth unless the company could protect itself from continuing losses from its mortgage insurance (MI) unit.Genworth's plan, disclosed a month after it named former ING executive Thomas McInerney as chief executive, will create a new holding company that will own the life and long-term care businesses, and the U.S. and European MI units.

Genworth Financial, Inc. (Genworth) is a financial security company. Shares of GNW traded higher by 10.21% or $0.83/share to $8.96. In the past year, the shares have traded as low as $4.06 and as high as $9.68. On average, 10162500 shares of GNW exchange hands on a given day and today's volume is recorded at 26285128.