Conseco Inc. says it has renegotiated the terms of a senior credit facility.
The deal should help Conseco, Carmel, Ind., (NYSE:CNO) increase its minimum risk-based capital requirements and give it more financial flexibility, the company says.
The changes will take effect when Conseco completes a previously announced public stock offering, the company says.
“While we are comfortable with the terms of our existing facility, the amended terms give us even greater financial flexibility, and we believe should help position us for improved credit ratings over time,” Conseco Chief Executive James Prieur says.
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The managers of the credit facility have been requiring Conseco to pay the facility 50% of the net proceeds from any stock sale.
Now, Conseco has agreed to pay the facility 75% — or $150 million – of the first $200 million in net stock sale proceeds, and 50% of any net stock sale proceeds over $200 million, the company says.
In exchange, many credit facility financial requirements will loosen up.