Actions taken by U.S. credit ratings agencies on Genworth Financial sent its shares skidding more than 4 percent Friday.
Genworth posted a large and unexpected third-quarter loss Thursday. The company was forced to dedicate more funds to reserves for its long-term care claims and goodwill impairments tied to its life and long-term care insurance business. Shares plunged 38 percent.
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Standard & Poor's Ratings Services lowered the company's long-term counterparty credit and senior unsecured debt ratings into junk-grade territory Friday, dropping it to "BB+" from "BBB-". The rating agency also lowered its financial strength ratings on its life insurance subsidiaries.
S&P said its outlook on Genworth is negative, which means it could be downgraded again soon.
And Moody's Investors Service put the company's rating on review for downgrade following the reserve announcement.
The Richmond, Virginia, company said it was disappointed in the ratings actions. CEO Tom McInerney said the company has solid capital positions across all of its businesses and strong liquidity. He said the company is attempting to improve its capital, financial flexibility, and earnings over time.
Shares of Genworth Financial Inc. fell 36 cents to $8.31 by early afternoon in high volume trading. Shares fell as low as $7.17 earlier in the day,