NU Online News Service, Dec. 26, 10:06 a.m. – Penn Treaty American Corp., Allentown, Pa., says it will try to borrow $45 million by selling a new series of convertible subordinated notes.
Penn Treaty helped create the modern long-term care insurance market, but it ran into trouble with insurance regulators in 2001 because of the regulators’ fear that it had too little capital to support its policies.
The company wants to use part of the cash raised through the new million note offering to meet the surplus requirement set for it by Florida insurance regulators.
The notes would pay an interest rate of 6.25% and mature in 2008. Holders could convert the new notes into shares of Penn Treaty common stock for $2.50 per share.
Penn Treaty is starting by offering the notes to its current shareholders and note holders.