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Conseco Takes Step Toward Refinancing Debt

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Conseco Inc. has completed previously announced plans to raise $300 million by issuing convertible “debentures,” or unsecured notes, through a private placement.[@@]

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

Recently, the company announced plans to issue the debentures and take other steps to refinance its existing financing with cheaper, more flexible forms of financing.

The new debentures pay an interest rate of 3.5% and are due Sept. 30, 2035.

The initial buyers have 13 days to buy up to $30 million in additional debentures.

The debenture holders can convert the debentures into shares of Conseco common stock under a variety of conditions at a price of about $26.66 per share.

Conseco can redeem the debentures for cash starting Oct. 5, 2010. The redemption price will equal “100% of the accreted principal amount of the debentures plus accrued and unpaid interest, if any, to the redemption date,” Conseco says.


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