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United States securities and exchange commission logo
October 13, 2020
Evan Stolove
Senior Vice President and General Counsel
Genworth Mortgage Holdings, Inc.
8325 Six Forks Road
Raleigh, NC 27615
Re: Genworth Mortgage
Holdings, Inc.
Draft Registration
Statement on Form S-1
Submitted September
15, 2020
CIK No. 0001823529
Dear Mr. Stolove:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form S-1
Our Parent and Principal Stockholder, page 8
1. Please briefly discuss
here your expected relationship with your parent company after the
offering and discuss
your status as a controlled company and whether you plan to rely
on the controlled
company exemptions from certain corporate governance
requirements. Please
also briefly summarize the potential conflicts of interest associated
with having a
controlling shareholder and the ability to your parent to control the outcome
of matters put to a
stockholder vote. Further, consistent with your disclosure on page 51,
clarify here that your
parent has substantial leverage and depends on you as a source of
liquidity. In addition,
briefly discuss your parent's proposed transaction with China
Oceanwide.
Evan Stolove
FirstName LastNameEvan Stolove
Genworth Mortgage Holdings, Inc.
Comapany
October 13,NameGenworth
2020 Mortgage Holdings, Inc.
October
Page 2 13, 2020 Page 2
FirstName LastName
If we are unable to continue to meet the requirements mandated by PMIERs, page
19
2. We note that in connection with and subsequent to the issuance of your
$750 million
aggregate principal amount of the 2025 Senior Notes, you have been
engaged in
discussions with the GSEs and FHFA to address certain GSE objectives,
and that as part
of these discussions, you have committed in principle to initially
retain $300 million of the
net proceeds from the offering of your 2025 Senior Notes for general
corporate purposes.
Please confirm that you will update your disclosure to detail any
additional terms or
commitments that derive from these ongoing discussions, and also
clarify what is meant
by "initially" retain $300 million of the net proceeds. Confirm that
you will also update to
disclose any material details or conditions that derive from the plan
you intend to submit
to the GSEs, and disclose when you expect to submit the plan.
Results of Operations and Key Metrics, page 81
3. Please revise to provide percentage changes for line items currently
labeled as NM, or tell
us why these changes are deemed to be not meaningful, especially for
key metrics such as
new delinquencies as disclosed on page 72 and losses incurred as
disclosed on page
83 that increased significantly in the periods presented.
Delinquent Loans and Claims, page 92
4. We note your reserves as a percentage of RIF decreased from 34% in
2018 to 27% in
2019 to 12% in the 6 months ended June 30, 2020. Please revise your
next amendment to
provide more fulsome disclosure explaining the material changes from
period-to-period
and how this ratio is used by management when determining direct case
reserves.
Sales and Marketing, page 119
5. Please identify here the separate entity you launched in 2019 to
insure pool transactions as
well as primary policies that are not intended for sale to the GSEs.
Credit Risk Transfer, page 123
6. We note that your traditional reinsurance coverage is provided by a
panel of reinsurance
partners. To the extent any particular third-party reinsurer or
reinsurance program is
material, please identify the company or companies from whom you
acquired reinsurance
and file any related agreements as exhibits. Please also file any
material agreements in
connection with your inaugural MILN transaction with Triangle Re or
advise.
Cybersecurity, page 127
7. We note your disclosure that your chief information officer and chief
information security
officer, together with your compliance organization, ensure the
requirements of your
information security program satisfy applicable legal and regulatory
requirements. To the
extent cybersecurity risks are material to your business, please also
disclose here or under
Evan Stolove
FirstName LastNameEvan Stolove
Genworth Mortgage Holdings, Inc.
Comapany
October 13,NameGenworth
2020 Mortgage Holdings, Inc.
October
Page 3 13, 2020 Page 3
FirstName LastName
another appropriately captioned section the nature of the board s
role in overseeing your
cybersecurity risk management, the manner in which the board
administers this oversight
function and any effect this has on the board s leadership
structure.
Investment Portfolio, page 128
8. Please disclose the material terms of your investment management
agreement with your
parent, including the compensation structure with and historical fees
paid for investment
management services, and file the investment management agreement as
an exhibit or tell
us why it is not required to be filed. We also note that for certain
asset classes you utilize
external asset management. If material, disclose the terms of any such
asset management
agreements and filed them as exhibits.
Exclusive Forum, page 159
9. We note your disclosure here that the exclusive forum provisions do
not apply to claims
under the Securities Act or the Exchange Act. Please also ensure that
the exclusive forum
provision in the governing documents states this clearly, or tell us
how you will inform
investors in future filings that the provision does not apply to any
actions arising under the
Securities Act or Exchange Act.
Notes to Consolidated Financial Statements Years Ended December 31, 2019 and
2018
Note 1. Nature of business and organization structure
Premiums, page F-9
10. We note that you record a liability and reduction to net earned
premiums for post-
delinquent premiums you expect to refund. Given the increase in
delinquencies during the
six months ended June 30, 2020, please include a rollforward of the
liability in your next
amendment for the periods presented.
General
11. Please provide us with copies of all written communications, as
defined in Rule 405 under
the Securities Act, that you, or anyone authorized to do so on your
behalf have presented
or expect to present to potential investors in reliance on Section
5(d) of the Securities Act,
whether or not you retained, or intend to retain, copies of those
communications. Please
contact John Stickel at the phone number below to discuss how to
submit the materials.
12. Please provide us with copies of any additional graphics, maps,
photographs, and related
captions or other artwork including logos that you intend to use in
the prospectus. Please
keep in mind, in scheduling printing and distributing of the
preliminary prospectus,
that we may have comments after reviewing the materials.
You may contact David Irving, Staff Accountant, at (202) 551-3321 or
Sharon Blume,
Accounting Branch Chief, at (202) 551-3474 if you have questions regarding
comments on the
financial statements and related matters. Please contact John Stickel,
Attorney-Advisor, at (202)
Evan Stolove
Genworth Mortgage Holdings, Inc.
October 13, 2020
Page 4
551-3324 or J. Nolan McWilliams, Attorney-Advisor, at (202) 551-3217 with any
other
questions.
Sincerely,
FirstName LastNameEvan Stolove
Division of
Corporation Finance
Comapany NameGenworth Mortgage Holdings, Inc.
Office of Finance
October 13, 2020 Page 4
cc: Michael Schiavone
FirstName LastName