NU Online News Service, Sept. 9, 4:25 p.m. – Conseco Inc., Carmel, Ind., says it has obtained a temporary waiver from banks holding $4.5 billion in credit agreements.
The waiver staves off demands for immediate repayment of the debt, which could have forced Conseco to file for bankruptcy court protection.
Conseco says the banks also granted a temporary extension of a previous waiver of the company’s debt-to-capitalization ratio, along with temporary waivers of “cross-default provisions” that could have led to demands for large, immediate payments related to certain loan guarantees.
The new waivers are set to expire Oct. 17, 2002, and the banks can revoke them at any time if more than half vote to do so, Conseco says.
Conseco announced Aug. 9 that it would exercise the 30-day grace periods on its upcoming bond interest payments, the first of which was due that day. It also began discussions with its lenders about restructuring its debt.
When the first of the grace periods expired Sept. 8, the company was technically in default.
In financial statements filed last month, Conseco said bankruptcy was one of the alternatives the company might use to resolve its financial difficulties.