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Portfolio > Mutual Funds > Bond Funds

Conseco Chief Calls Note Exchange A Success

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NU Online News Service, April 19, 10:29 a.m. – Conseco Inc., Carmel, Ind., says institutional noteholders have tendered 51% of the $2.54 billion in notes eligible for its recently completed note exchange.

When Conseco announced the exchange in March, it offered to trade existing notes for notes with the same principal amounts and interest rates, but maturity dates 12 months to 30 months in the future.

In return for accepting the extended maturities, noteholders who accepted the offer received notes that will rank higher in precedence if Conseco ends up in bankruptcy court.

Conseco originally scheduled the exchange to end April 12, but it extended the deadline to April 17 to “accommodate some remaining small positions,” according to a memo to investors from Conseco Chief Executive Gary Wendt.

Holders cashed in about $10 million more notes after April 12, Wendt writes in the memo.

“We consider this project to have been highly successful,” Wendt writes. “At no additional cost for any bond, we have gained important flexibility to deal with Conseco’s debt situation.”

Conseco has now pushed many payments that were previously due in 2004 and 2005 back past 2006, according to figures accompanying Wendt’s memo.


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