Standard & Poor’s (S&P) has downgraded the outlook for Genworth’s Australian and New Zealand mortgage insurance businesses.

The agency reaffirmed Genworth Australia’s AA- rating but its outlook is now negative, with the New Zealand operation on the same level.

Another local group member, Genworth Indemnity, had its A- rating confirmed, with a stable outlook.

It comes after S&P downgraded US parent Genworth Financial Inc from BBB to BBB-. It also put life subsidiary Genworth Life down a notch to A- and its mortgage subsidiary down to BBB-.

S&P says the Australasian businesses’ outlooks were downgraded because the policy of maintaining a two-notch differential between them and the US life business was breached.

“The outlook revision reflects our opinion that ongoing stress at the group’s holding company level has heightened the importance of contributions from the group’s subsidiaries, including Genworth Australia,” S&P Credit Analyst Lucy Huynh said.

The main Australian ratings were not lowered because S&P expects the sale of 40% of Genworth Australia to go ahead as planned in the first half of next year.