Genworth Financial Inc., the insurer whose debt is graded one level above junk by Standard & Poor’s, had its outlook lifted to stable from negative by the ratings firm.
“We expect Genworth to generate improved earnings for full-year 2013,” S&P said today in a statement on the Richmond, Virginia-based insurer. “The revised outlook reflects continued favorable strategic execution and improved earnings.”
Chief Executive Officer Tom McInerney reorganized Genworth and divested the wealth-management unit this year after starting in January. The insurer sold $400 million of 10-year notes last month to help redeem bonds due in 2015.
Genworth gained 2.6 percent to $12.44 at 4:01 p.m. in New York. It has rallied 66 percent this year.
The cost to protect Genworth’s debt from default for five years fell to the lowest level in two weeks. Credit-default swaps on the company’s debt declined 6 basis points to a mid-price of 180 basis points, according to data provider CMA, which is owned by McGraw Hill Financial Inc. and compiles prices quoted by dealers in the privately negotiated market.
Credit-default swaps, which typically fall as investor confidence improves and rise as it deteriorates, pay the buyer face value if a borrower fails to meet its obligations, less the value of the defaulted debt. A basis point equals $1,000 annually on a contract protecting $10 million of debt.