Genworth Financial has entered interest rate swaps totaling USD1.58 billion (notional) in anticipation of issuing notes worth a total USD1.9 billion, which were being marketed last week. According to the firm's S-1 filing, made June 2, Genworth entered several swaps in order to hedge the benchmark interest rate on portions of its floating and fixed-rate note offerings. The notes comprise of a USD500 million three-year floating rate note and USD500 million, USD600 million and USD300 million of fixed-rate five, 10 and 30-year bonds respectively. Jean Peters, senior v.p. in investor relations in Richmond, Va., did not return calls.
The swaps mirror the maturities on the bonds, ranging from 2007 to 2034, according to the filing. As a result of the hedges, the interest rate of USD400 million of the floating-rate notes has been fixed at 3.1875%. For the fixed-rate offerings, USD400 million of the five-year note has been set at 4%, USD480 million of the 10-year has been set at 4.9% and the entire USD300 million 30-year offering has been fixed at 5.564%.
