Conseco Inc. says it hopes to replace some of its secured debt with cheaper, more flexible unsecured debt.[@@]

Conseco, Carmel, Ind., had to borrow money on unattractive terms to finance its recovery from Chapter 11 bankruptcy reorganization proceedings in September 2003.

Conseco, a holding company for life and health insurance companies, now has asked investment banking units of Bank of America Corp., Charlotte, N.C., and J.P. Morgan Chase & Company, New York, to help it reduce the principal amount borrowed through a senior secured credit agreement to $475 million, from the current value of $767 million.

Conseco also hopes to get lower interest rates, relaxed financial standards and increased ability to raise money through other capital arrangements, the company says.

In related news, the company says it plans to raise up to $330 million by issuing convertible debentures, or unsecured notes, through a private placement.

Conseco hopes to use the proceeeds from the sale of the debentures to lower the balance on its current credit facility.