NU Online News Service, June 22, 2004, 5:34 p.m. EDT
Conseco Inc., Carmel, Ind., says it has succeeded at refinancing $800 million in bank debt.[@@]
Conseco has agreed to pay a floating interest rate on the new bank debt that is 4 percentage points higher than the London interbank offered rate.
Conseco can cut the interest margin to 3.5 percentage points by getting a senior credit rating of B2 from Moody’s Investors Service, New York, Conseco says.
Units of Bank of America Corp., Charlotte, N.C., and J.P. Morgan Chase & Company, New York, arranged the new bank debt facility.
Conseco is using the new bank financing and proceeds from recent offerings of common stock and preferred stock to redeem an old class of preferred stock, repay $1.3 billion in existing bank debt, and improve insurance subsidiaries’ risk-based capital ratios, Conseco says.
The refinancing will cut the cost of payments to Conseco’s lenders and preferred shareholders $90 million per year, Conseco says.