Exhibit 99.1
NEWS
For Release Immediate
Contacts (News Media) Tony Zehnder, EVP, Corporate Communications
312.396.7086
(Investors) Lowell Short, SVP, Finance or Tammy Hill, SVP,
Investor Relations 317.817.2893
Conseco Completes Private Offering of Convertible Debentures
Carmel, Ind., August 9, 2005 - Conseco, Inc. (NYSE:CNO) announced today that it
has priced its $300 million private offering of 3.50% Convertible Debentures due
September 30, 2035. The debentures were offered only to qualified institutional
buyers under Rule 144A of the Securities Act of 1933, as amended. The Company
has granted the initial purchasers a 13-day option to purchase up to an
additional $30 million principal amount of debentures.
The Company intends to use proceeds from the offering to repay term loans
currently outstanding under its senior credit facility. The offering is expected
to close on August 15, 2005, subject to certain closing conditions.
The debentures will bear interest at a rate of 3.50% per year, payable
semi-annually, beginning on March 31, 2006 and ending on September 30, 2010.
Thereafter, the principal amount of the debentures will accrete at a rate that
provides holders with an aggregate yield to maturity of 3.50%, computed on a
semi-annual, bond-equivalent basis.
The debentures will be convertible at the option of the holders, upon the
occurrence of certain specified events, into cash or, under certain
circumstances, cash and shares of the Company's common stock at an initial
conversion price of approximately $26.66 per share. The initial conversion price
represents a premium of 27.5% over today's closing price of the Company's common
shares.
On or after October 5, 2010, the Company may redeem for cash all of a portion of
the debentures at any time at a redemption price equal to 100% of the accreted
principal amount of the debentures plus accrued and unpaid interest, if any, to
the redemption date. Holders may require the Company to repurchase in cash all
or any portion of the debentures on September 30, 2010, 2015, 2020, 2025 and
2030 at a repurchase price equal to 100% of the accreted principal amount of the
debentures to be repurchased, plus accrued and unpaid interest, if any, to the
applicable repurchase date.
Holders of the debentures may convert their debentures only if (1) the price of
the Company's common stock reaches a specified threshold, (2) the trading price
for the debentures falls below a specified threshold, (3) the debentures have
been called for redemption or (4) specified corporate transactions occur.
The debentures and the common shares issuable upon conversion thereof have not
been registered under the Securities Act of 1933 or any state securities laws,
and may not be offered or sold in the United States absent registration or an
applicable exemption from registration requirements.
This press release shall not constitute an offer to sell or the solicitation of
an offer to buy any of the debentures to be offered, nor shall there be any sale
of debentures in any state in which such offer, solicitation or sale would be
unlawful.
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Conseco (2)
August 9, 2005
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
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) our ability to achieve an upgrade of the
financial strength ratings of our insurance company subsidiaries and the impact
of prior rating downgrades on our business; (ii) the ultimate outcome of
lawsuits filed against us and other legal and regulatory proceedings to which we
are subject; (iii) our ability to obtain adequate and timely rate increases on
our supplemental health products including our long-term care business; (iv)
mortality, morbidity, usage of health care services, persistency and other
factors which may affect the profitability of our insurance products; (v) our
ability to achieve anticipated expense reductions and levels of operational
efficiencies; (vi) the adverse impact of our Predecessor's bankruptcy
proceedings on our business operations, and relationships with our customers,
employees, regulators, distributors and agents; (vii) performance of our
investments; (viii) customer response to new products, distribution channels and
marketing initiatives; (ix) the risk factors or uncertainties listed from time
to time in our filings with the Securities and Exchange Commission; (x) general
economic conditions and other factors, including prevailing interest rate
levels, stock and credit market performance and health care inflation, which may
affect (among other things) our ability to sell products and access capital on
acceptable terms, the returns on and the market value of our investments, and
the lapse rate and profitability of policies; (xi) changes in the Federal income
tax laws and regulations which may affect or eliminate the relative tax
advantages of some of our products; and (xii) regulatory changes or actions,
including those relating to regulation of the financial affairs of our insurance
companies, such as the payment of dividends 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.
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.
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