New York, April 18 - Conseco, inc. said its exchange offer to lengthen the maturities of its debt attracted participation from holders of $1.295 billion of its bonds.
Most of the notes exchanged were at the longer maturities. The percentage exchange ranged from a negligible amount of the notes due 2002 to 91% of the longest maturity due 2008. (Participation rates are shown in Table 1)
"We consider this project to have been highly successful. At no additional cost for any bond, we have gained important flexibility to deal with Conseco's debt situation - the #1 agenda item for our turnaround," said Conseco chief executive officer Gary Wendt in his "New Conseco Memo #23" announcing the exchange results.
Conseco closed the exchange offer at 5.00 p.m. ET on April 17 after extending it by two business days to accommodate some more small positions. Holders of an extra $10 million took part, Conseco said.
In total, $1,294,637,000 of bonds were tendered in the exchange, 51% of the $2.54 billion principal outstanding.
Conseco announced the exchange on March 18, with the goal of extending maturities on bonds owned by qualified institutional investors by one to 2½ years.
All the bonds to be exchanged will have the same coupon and principal amount but a later maturity date and a more senior ranking in the company's capital structure.
Conseco was looking to extend the 8.5%, 6.4% and 10.75% notes by one year, the 9% notes by 18 months, the 6.8% notes by two years and the 8.75% notes by 2½ years.
Conseco said that the benefits include smoothing out the amounts due over time, as shown in Table 2.
Table 1. Results of Conseco exchange offer
Outstanding Tendered Percentage
| 8.50% senior notes due 2002 | $302,299,000 | $991,000 | --
|
| 6.40% senior notes due 2003 | $250,000,000 | $14,936,000 | 6%
|
| 8.75% senior notes due 2004 | $788,000,000 | $366,294,000 | 46%
|
| 6.80% senior notes due 2005 | $250,000,000 | $150,783,000 | 60%
|
| 9.00% senior notes due 2006 | $550,000,000 | $399,200,000 | 73%
|
| 10.75% senior notes due 2008 | $400,000,000 | $362,433,000 | 91%
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| Table 2: Conseco debt maturities by year
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| ($ in millions) | Before Exchange | After Exchange
|
| 2002 | $304.1 | $302.3
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| 2003 | $313.5 | $299.6
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| 2004 | $812.5 | $461.1
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| 2005 | $250.0 | $99.2
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| 2006 | $550.0 | $517.1
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| 2007 | -- | $150.8
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| 2008 | $400.0 | $436.8
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| 2009 | $0.7 | $363.1
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| Figures include $87 million of public debt not subject to exchange offer.
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