Housing melt claims Genworth IPO

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Genworth have announced a “new timing” for its planned IPO (initial public offering) of its Australian mortgage insurance business. The release, which is attached below, claims the move, planned for the second quarter of 2012 but now pushed back to “early 2013” reflected “recent business performance in Australia”:

For the 2012 first quarter, the company expects to report elevated loss experience in Australia as lenders accelerated the processing of later-stage delinquencies from prior years through to foreclosure and claim at a higher rate and severity than expected, particularly in coastal areas of Queensland that experienced natural catastrophes and regional economic slowdowns and among certain groups of small business owners and self-employed borrowers. First quarter experience is anticipated to result in a modest first quarter loss in the Australian MI business.

Like those who blame the lacklustre GDP growth on the floods, Genworth is pinning some of the blame on natural causes, when we all know its man-made.

Not sure how many institutions will pick up this IPO – or how many retail punters will be pushed into filling the book. But this release certainly puts a damper on the initial price.

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GNW 1Q12 Australia IPO Announcement Final