NU Online News Service, June 1, 2004, 5:46 p.m. EDT – Conseco Inc. has taken a big step back toward financial respectability.[@@]
Moody’s Investors Service, New York, has increased the credit ratings on Conseco’s bank debt to B3, from Caa1, and increased the insurance financial strength ratings on most of Conseco’s insurance units to Ba2, from Ba3.
The rating agency also affirmed the Caa1 financial strength rating on Conseco’s struggling Conseco Senior Health Insurance Company, which has talked about its efforts to overcome past problems with loose home health care insurance policy provisions and erratic claim review procedures.
Moody’s also is thinking about coming out with another rating upgrade for all Conseco units except Conseco Senior Health, according to a comment on the current upgrades by Robert Riegel and Scott Robinson, 2 Moody’s analysts who follow Conseco.
Conseco emerged from Chapter 11 bankruptcy reorganization proceedings in September 2003. During the reorganization, Conseco sold loss-ridden consumer finance businesses and focused on its life, health and specialty insurance operations.
Conseco recently raised $923 million by issuing new common stock and $690 million by issuing new preferred stock. The company also is in the process of redeeming its old preferred stock and refinancing its bank debt, Moody’s says.
The moves should reduce Conseco’s level of bank debt and the amount of cash the company must spend on making debt payments, according to Riegel and Robinson.