Genworth Names Nicholas CFO of Australia Unit Before IPO
Genworth (GNW) Financial Inc. named Georgette Nicholas chief financial officer of the Australian mortgage-insurance unit that is preparing for an initial public offering.
Nicholas, 49, currently leads investor relations for the parent company and was previously CFO of Richmond, Virginia-based Genworth’s U.S. mortgage-guaranty business, the insurer said in a statement yesterday. She starts her new position in February and replaces Paul Fegan, who is leaving to focus on his duties as an independent director at other companies, according to the statement.
Chief Executive Officer Tom McInerney is selling assets and raising capital to bolster the company’s credit rating, which is one level above junk status at Standard & Poor’s. Genworth could generate $800 million by selling 40 percent of the Australia unit at book value, helping McInerney address “capital question marks” amid tighter U.S. mortgage regulation, Sean Dargan, an analyst at Macquarie Group Ltd., wrote in a note this week.
With Nicholas’s move, “along with the continued good performance of the business through the third quarter of this year, we remain focused on the strategic priority of a potential minority IPO of Australia, for which we expect better execution opportunities in 2014,” Genworth CFO Martin Klein said in the statement.
Then-CEO Michael Fraizer shelved an IPO of the Australia mortgage guarantor in 2012 as the unit suffered from losses. McInerney, who took over in January, said in July the company was targeting a share sale in the final three months of this year or later, depending on Australian markets. In September, he said the IPO would probably come in 2014.
McInerney in September completed the sale of its wealth-management unit to a group led by Aquiline Capital Partners LLC for $412.5 million. He is seeking to focus on businesses including life insurance and long-term care coverage.
Genworth said separately yesterday that it priced an offering of $400 million in senior notes due in 2024. The interest rate is 4.8 percent, and proceeds will probably be used to add capital to U.S. mortgage-insurance units, the company said.
The financial strength rating of the units was put under review for a possible upgrade by Moody’s Investors Service after the debt sale was announced. Deutsche Bank AG (DBK), Goldman Sachs Group Inc. and JPMorgan Chase & Co. (JPM) were managing the offering.
Genworth fell 1.1 percent to $15.08 in New York trading yesterday. The company has doubled this year, the best performance in the 21-company Standard & Poor’s 500 Insurance Index.
The insurer is conducting a search for a successor to Nicholas in the investor-relations post, according to an e-mail from Tom Topinka, a spokesman for the insurer.
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