Genworth plans IPO of up to $754m

Genworth Mortgage Insurance Australia plans to raise between $429 million and $754m in an initial public offering.

In a prospectus posted on its website and lodged with Australian Securities and Investments Commission (ASIC), Genworth Australia said it plans to sell between 195m and 260m shares at between $2.20 and $2.90 a share to individual investors and fund managers beginning next month.

The shares will begin trading on the ASX on May 23. Genworth Australia is priced at an indicative dividend yield of 6.7% to 8.9%.

Between 30% and 40% of Genworth Australia will be sold in the IPO. Genworth Australia’s total number of shares is 650m, giving it a potential market value of between $1.43bn and $1.88bn. 

Genworth Financial Group, the US-based parent company, will continue to own at least 60 per cent of Genworth Australia after the IPO. The proceeds from the IPO will be used to repay intragroup funding at Genworth Financial. Genworth Australia will not get any proceeds from the IPO.

Genworth Australia facilitates residential mortgage lending by transferring risk from lenders to mortgage insurance providers, predominantly for high loan-to-value ratio residential mortgages.