Genworth Financial, Inc. (NYSE:GNW) Q1 2018 Earnings Conference Call - Final Transcript
May 02, 2018 • 08:00 am ET
Ladies and gentlemen, at this time, we will begin the Q&A portion of the call. [Operator Instructions] We can now take our first question. It comes from Ryan Krueger of KBW. Please go ahead, sir.
Hi, thanks. Good morning. First question on CFIUS. Given the shortened review period this time, is it your expectation that they will make a final decision one way or another at the end of this review period?
Ryan, thanks for your question. The first thing I would say is, I think we're having productive conversations with CFIUS. And of course we're encouraged that they agreed to focus on the 45-day investigation period. I think the third-party US data security provider has made a difference, but it's -- there's -- hard to tell where we'll end up. And at this point, obviously, we can't give any assurances on where CFIUS will end up. We would hope that we will reach a conclusion by the end of this review period, but it is possible that it continues after that depending on where the conversations go.
Got it. And then on Delaware, was the value of GLAIC the only heated agreement that there was from Delaware in terms of approving the merger or were there other issues you need to work out as well?
Yeah. Ryan, another key question. I would say that Delaware, Virginia, North Carolina, New York are all states that have to approve the transaction, generally have been supportive of the transaction because of the capital benefits, and Kelly and I talked about the $1.5 billion that we're going to re-purpose from Oceanwide in the new capital plan, but I think they are supportive of the deal. It has always been an issue because we -- and I gave the reasons that we wanted to do the un-stacking, but we felt that the right value given the future cash flows and dividend stream for GLAIC was $700 million. Delaware and their advisor saw it differently. And while we tried to get to a meaningful place to do the un-stacking, we ultimately, Oceanwide and Genworth, concluded that it made more sense to move forward at this point to no longer pursue the un-stacking and go forward with the transaction without that. We now have to redo the Form A filings in the states, go back to all the regulators with the new structure of the deal, but I'm confident that Delaware and Virginia and the other regulators are comfortable with the transaction, and without the un-stacking.
Thanks. And then one last one just on the comments that you have no intention to contribute additional capital to GLAIC, would that still be the case in a scenario where GLAIC's capital position deteriorates to the point that there was regulator intervention? Would it still be the position of the parent company that you would not put in additional capital in it in any circumstance?
We've had a lot of conversations with the regulators during the last three to five