Conseco offers cash for debentures due 2035

Conseco offers cash for 3.5 percent debentures due 2035

• On 12:56 pm EDT, Thursday October 15, 2009

CARMEL, Ind. (AP) -- Insurer Conseco Inc. on Thursday began its previously announced cash offer to repurchase outstanding 3.5 percent convertible debentures due Sept. 30, 2035.

The company says it has about $293 million of the debentures outstanding.

The tender offer will expire at midnight, New York time, on Nov. 12.

Debenture holders are eligible to receive $1,000 for each $1,000 principal amount of debentures tendered and accepted for payment. They also will receive accrued and unpaid interest up to the settlement date.

Conseco expects to pay for debentures that have been tendered and accepted for purchase following the expiration date.

The Carmel, Ind.-based company announced the repurchase as part of a larger debt reorganization and capital improvement strategy. It also plans to raise $200 million through a general stock offering in addition to $78 million through a stock and warrant purchase agreement with Paulson & Co. Inc., an employee-owned hedge fund sponsor. Conseco also privately placed $293 million of 7 percent convertible senior debentures due 2016, using the proceeds for debt buyback.

Shares rose Wednesday to a new 52-week high and advanced 10 cents Thursday to $6.56 in afternoon trading.