Conseco Closes Amendment to Credit Facility
March 31 2009 - 7:36AM
PR Newswire (US)
CARMEL, Ind., March 31 /PRNewswire-FirstCall/ -- Conseco, Inc.
(NYSE: CNO), reported today that it has completed the previously
announced amendment of its credit facility. The changes made to the
credit agreement include: -- An increase in the debt to capital
ratio through June 30, 2010 to 32.5%, returning to 30% thereafter;
-- A decrease in the interest coverage ratio to 1.5x through June
30, 2010, returning to 2.0x thereafter; -- A decrease in the
minimum risk based capital ratio to 200% through June 30, 2010,
returning to 250% thereafter; -- A decrease in the minimum level of
statutory capital to $1.1 billion through June 30, 2010, returning
to $1.27 billion thereafter; and -- An increase in the annual
interest rate payable by the Company to either LIBOR + 4.00%, with
a LIBOR floor of 2.50%, or a base rate + 3.00%, with a base rate
floor of 3.50%, plus in either case an additional 1% that will be
added to the principal balance of the facility and will be payable
at the facility's maturity date. As a result of the amendment, the
Company's current cash interest rate on the $911.8 million
outstanding under the credit facility increased from approximately
2.6% to 7.5%. The amendment also places additional restrictions on
the Company's ability to incur certain additional indebtedness,
among other restrictions. The amendment made no changes to the
amount borrowed under the credit facility, to the principal
repayment schedule or to the collateral pledged as security for the
facility. About Conseco Conseco, Inc.'s insurance companies help
protect working American families and seniors from financial
adversity: Medicare supplement, long-term care, cancer,
heart/stroke and accident policies protect people against major
unplanned expenses; annuities and life insurance products help
people plan for their financial futures. For more information,
visit Conseco's web site at http://www.conseco.com/. Cautionary
Statement Regarding Forward-Looking Statements. Our statements,
trend analyses and other information contained in this press
release relative to markets for Conseco's products and trends in
Conseco's operations or financial results, as well as other
statements, contain forward-looking statements within the meaning
of the federal securities laws and the Private Securities
Litigation Reform Act of 1995. Forward-looking statements typically
are identified by the use of terms such as "anticipate," "believe,"
"plan," "estimate," "expect," "project," "intend," "may," "will,"
"would," "contemplate," "possible," "attempt," "seek," "should,"
"could," "goal," "target," "on track," "comfortable with,"
"optimistic" and similar words, although some forward-looking
statements are expressed differently. You should consider
statements that contain these words carefully because they describe
our expectations, plans, strategies and goals and our beliefs
concerning future business conditions, our results of operations,
financial position, and our business outlook or they state other
'forward-looking' information based on currently available
information. Assumptions and other important factors that could
cause our actual results to differ materially from those
anticipated in our forward-looking statements include, among other
things: (i) general economic, market and political conditions,
including the performance and fluctuations of the financial markets
which may affect our ability to raise capital or refinance existing
indebtedness and the cost of doing so; (ii) our ability to continue
to satisfy the financial ratio and balance requirements and other
covenants of our debt agreements; (iii) our ability to generate
sufficient liquidity to meet our debt service obligations and other
cash needs; (iv) our ability to obtain adequate and timely rate
increases on our supplemental health products including our
long-term care business; (v) the receipt of required regulatory
approvals for dividend and surplus debenture interest payments from
our insurance subsidiaries; (vi) mortality, morbidity, the
increased cost and usage of health care services, persistency, the
adequacy of our previous reserve estimates and other factors which
may affect the profitability of our insurance products; (vii)
changes in our assumptions related to the cost of policies produced
or the value of policies in force at the effective date of our
emergence from bankruptcy; (viii) the recoverability of our
deferred tax asset and the effect of potential tax rate changes on
its value; (ix) changes in accounting principles and the
interpretation thereof; (x) our ability to achieve anticipated
expense reductions and levels of operational efficiencies including
improvements in claims adjudication and continued automation and
rationalization of operating systems, (xi) performance and
valuation of our investments, including the impact of realized
losses (including other-than-temporary impairment charges); (xii)
our ability to identify products and markets in which we can
compete effectively against competitors with greater market share,
higher ratings, greater financial resources and stronger brand
recognition; (xiii) the ultimate outcome of lawsuits filed against
us and other legal and regulatory proceedings to which we are
subject; (xiv) our ability to complete the remediation of the
material weakness in internal controls over our actuarial reporting
process and to maintain effective controls over financial
reporting; (xv) our ability to continue to recruit and retain
productive agents and distribution partners and customer response
to new products, distribution channels and marketing initiatives;
(xvi) our ability to achieve eventual upgrades of the financial
strength ratings of Conseco and our insurance company subsidiaries
as well as the potential impact of ratings downgrades on our
business; (xvii) the risk factors or uncertainties listed from time
to time in our filings with the Securities and Exchange Commission;
(xviii) regulatory changes or actions, including those relating to
regulation of the financial affairs of our insurance companies,
such as the payment of dividends and surplus debenture interest to
us, regulation of financial services affecting (among other things)
bank sales and underwriting of insurance products, regulation of
the sale, underwriting and pricing of products, and health care
regulation affecting health insurance products; and (xix) changes
in the Federal income tax laws and regulations which may affect or
eliminate the relative tax advantages of some of our products.
Other factors and assumptions not identified above are also
relevant to the forward-looking statements, and if they prove
incorrect, could also cause actual results to differ materially
from those projected. All written or oral forward-looking
statements attributable to us are expressly qualified in their
entirety by the foregoing cautionary statement. Our forward-looking
statements speak only as of the date made. We assume no obligation
to update or to publicly announce the results of any revisions to
any of the forward-looking statements to reflect actual results,
future events or developments, changes in assumptions or changes in
other factors affecting the forward-looking statements. DATASOURCE:
Conseco, Inc. CONTACT: News Media: Tony Zehnder, Corporate
Communications +1-312-396-7086, Investors: Scott Galovic, Investor
Relations, +1-317-817-3228, both of Conseco, Inc. Web Site:
http://www.conseco.com/
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