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Insurance industry

Conseco Announces Receivables Sale and Amended Financing Facilities

Strategic Insights

— 1 min read

Conseco, a leading insurance and investment company, has completed a $1.3 billion receivables sale to Lehman Brothers and affiliates, as well as amended its repurchase and other financing facilities. The increased liquidity from these transactions has enabled Conseco Finance to repay approximately $500 million of intercompany indebtedness owed to Conseco. As part of the agreement, Lehman Brothers received a warrant for 5% of Conseco Finance.

The receivables sale and amended financing facilities are expected to create increased warehousing capacity for Conseco Finance, allowing the company to continue underwriting loans in an attractive environment. Additionally, the increased flexibility in managing Conseco's capital structure is expected to benefit the company during the ongoing sale process of Conseco Finance Corp.

Key Takeaways:

  • Conseco has sold approximately $1.3 billion in receivables to Lehman Brothers and affiliates.
  • The receivables sale is not expected to result in a material gain or loss for Conseco.
  • Lehman Brothers received a warrant for 5% of Conseco Finance as partial consideration for the financing transaction.
  • Conseco Finance has repaid approximately $500 million of intercompany indebtedness owed to Conseco.
  • The amended financing facilities provide additional liquidity for Conseco Finance, enabling the company to continue underwriting loans.
  • The increased liquidity is expected to benefit Conseco's capital structure during the sale process of Conseco Finance Corp.

Statistics:

  • $1.3 billion: the amount of receivables sold by Conseco Finance to Lehman Brothers and affiliates.
  • 5%: the warrant received by Lehman Brothers for Conseco Finance.
  • $500 million: the amount of intercompany indebtedness repaid by Conseco Finance.
  • 13 million: the number of customers served by Conseco and its subsidiaries.
  • CFG: the abbreviation for Conseco Finance Corp., a subsidiary of Conseco.

Sources:

  • Business Wire, "Conseco Announces Receivables Sale and Amended Financing Facilities" (May 12, 2000)
  • Conseco's Form 10-Q filing with the Securities and Exchange Commission for the quarter ended March 31, 2000
  • Conseco's website: www.conseco.com

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