Conseco $800 million term loan to launch June 3

By Sara Rosenberg

New York, May 25 - Conseco, Inc. is scheduled to hold a bank meeting on June 3 for a proposed credit facility that will contain an $800 million term loan, according to market sources. Bank of America is the lead bank on the deal.

Whether there will be any other tranches under the proposed facility was unclear prior to press time.

Proceeds will be used to refinance existing bank debt.

As of March 31 the company had about $1.3 billion of outstanding bank debt consisting of a $1 billion term loan A and a $300 million term loan B. As of Sept. 30 the term A carried an interest rate of Libor plus 525 basis points with a 2% Libor floor and the term B carried an interest rate of Libor plus 725 basis points with a 2.25% Libor floor.

However, on May 6, the company priced public offerings of 44 million shares of common stock at an offering price of $18.25 per share and 24 million shares of its 5.5% class B mandatorily convertible preferred stock at an offering price of $25 per share. Of the proceeds received from the offerings, Conseco planned to repay about $400 million of bank debt.

Conseco is a Carmel, Ind., provider of supplemental health insurance, life insurance and annuities.

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