CNO Financial to launch $700 million credit facility on Friday

By Sara Rosenberg

New York, Sept. 5 - CNO Financial Group Inc. has set a bank meeting for 10 a.m. ET on Friday to launch its proposed $700 million credit facility, according to a market source.

Goldman Sachs & Co. and J.P. Morgan Securities LLC are the lead banks on the deal.

The facility consists of a $50 million three-year unfunded revolver, a $250 million four-year term loan and a $400 million six-year term loan.

Proceeds will be used to help repay all $224 million outstanding under the company's existing senior secured credit facility, repurchase up to $275 million of 9% senior secured notes due 2018 for about $323 million and repurchase about $200 million of 7% convertible senior debentures due 2016 from Paulson & Co. for around $334 million.

Other funds for the transaction will come from $250 million of new senior secured notes due 2020 and cash on hand.

Closing on the refinancing is expected in late September.

As a result of the recapitalization, the company will extend maturities to 2020, rebalance its fixed-and floating-rate debt, lower its weighted average coupon rate and reduce its convertible overhang, according to an 8-K filed with the Securities and Exchange Commission on Wednesday.

CNO is a Carmel, Ind.-based insurance company.

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