U.S. mortgage giant Genworth Financial is raising cash by launching an $850 million initial public offering of shares of its Canadian operations.

Oakville, Ont.-based Genworth MI Canada Inc. has entered into an underwriting agreement for the initial public offering of 44.7 million shares at $19 each. The IPO will generate total gross proceeds of approximately $850 million.

Of the 44.7 million common shares being offered, 5.1 million shares are being sold by Genworth MI Canada, and 39.6 million shares are being sold by Genworth Financial, Genworth MI Canada’s parent company.

Genworth MI Canada will receive proceeds of approximately $97 million, to be used to retire all outstanding debt and further enhance its well-capitalized financial position.

The majority of the proceeds, approximately $753 million, will be received by Genworth Financial.

Based on the initial offering price, Genworth MI Canada would have a market capitalization of approximately $2.2 billion.

The closing is scheduled for July 7, subject to customary closing conditions, after which the shares of Genworth MI Canada will begin trading on the Toronto Stock Exchange under the symbol MIC.

Underwriters hold an option to sell an additional $127 million of stock, if $977 million of stock is sold, it will be the largest IPO seen this year on the Toronto Stock Exchange, and the fourth-largest IPO on the TSX since 2001.

If the underwriters over-allotment of option is exercised in full, Genworth would have a 56% percent ownership interest in Genworth MI Canada Inc.

CIBC World Markets Inc., Goldman Sachs Canada Inc., and Scotia Capital Inc. are the joint book-runners and co-lead managers for the offering.

Genworth MI Canada Inc., provides private residential mortgage insurance through its subsidiary, Genworth Financial Mortgage Insurance Co. Canada.