NU Online News Service, Aug. 1, 10:45 a.m. – Healthaxis Inc., Irving, Texas, says it has eliminated $27.5 million of long-term debt by trading preferred stock for debt securities called debentures.

HealthAxis extinguished the debentures by paying the holders $4 million in cash and giving them preferred shares that can be converted into common stock for $2.625 per share, HealthAxis says.

The preferred stock is supposed to pay a fixed, annual dividend rate of 2%.

The deal will increase shareholders’ equity by more than $23 million, to $38 million, according to James McLane, the company’s chairman.

HealthAxis develops Web-based software systems for selling and administering health plans.