CHICAGO, May 4 /PRNewswire/ -- Duff & Phelps Credit Rating Co. (DCR) has
lowered all ratings related to Conseco Inc. (Conseco). These ratings remain
on Rating Watch--Down. The ratings are listed below.
The rating actions reflect a series of recent developments that include
lower-than-expected first quarter 2000 operating results in the insurance
segment, reduced financial flexibility as a result of continuing capital
market concerns and DCR's belief that given the current market environment,
Conseco will be challenged to receive optimal valuation on the disposition of
Conseco Finance. These events led to the resignations of Conseco's chief
executive officer and chief financial officer on April 28.
DCR believes that Conseco's insurance subsidiaries are adequately
capitalized and have not been materially impacted by holding company concerns
to date. The rating actions on insurance subsidiaries represent the weakened
position of the holding company given recent developments.
Over the next several weeks, DCR will continue to closely monitor
developments related to the sale of Conseco Finance, financing capacity of
Conseco Finance, initiatives to improve financial flexibility and potential
impact of these issues on the insurance operations. If progress is not made
or credit quality deteriorates, DCR will consider further downward rating
actions.
On March 31, 2000, Conseco announced that it intends to sell Conseco
Finance, its finance operation formerly known as Green Tree Financial Corp.
(Green Tree). Conseco Finance has the dominant market position in the
manufactured housing sector, lending to both consumers and dealers. The
company also has solid market positions in retail home equity and home
improvement loans. On June 30, 1998, Conseco acquired Green Tree in a
pooling-of-interest transaction valued at $6 billion.
Conseco is a publicly traded holding company based in Carmel, Ind., with
total assets of $52.2 billion and shareholders' equity of $6.3 billion
(excluding FAS 115) at December 31, 1999. Conseco's insurance operation is a
leading provider of universal life insurance, long-term care insurance,
Medicare supplement, specified disease insurance and equity-indexed annuities.
DCR has taken the following rating actions and all ratings remain on
Rating Watch-Down:
Claims Paying Ability: from: to:
Bankers Life & Casualty Ins. Co. 'AA-'(Double-A-Minus) 'A' (Single-A)
Conseco Annuity Assurance Co. 'AA-'(Double-A-Minus) 'A' (Single-A)
Conseco Direct Life Insurance Co. 'AA-'(Double-A-Minus) 'A' (Single-A)
Conseco Health Company 'AA-' (Double-A-Minus) 'A' (Single-A)
Conseco Life Ins. Co. 'AA-' (Double-A-Minus) 'A' (Single-A)
Conseco Life Ins. Co. of New York 'AA-'(Double-A-Minus) 'A' (Single-A)
Conseco Medical Ins. Co. 'AA-' (Double-A-Minus) 'A' (Single-A)
Conseco Senior Health Ins. Co. 'AA-' (Double-A-Minus) 'A' (Single-A)
Conseco Variable Insurance Co. 'AA-' (Double-A-Minus) 'A' (Single-A)
Manhattan National Life Ins. Co. 'AA-'(Double-A-Minus) 'A'(Single-A)
Pioneer Life Insurance Co. 'AA-'(Double-A-Minus) 'A'(Single-A)
Conseco, Inc.
Senior Debt 'BBB+' (Triple-B-Plus) 'BBB-' (Triple-B-Minus)
Preferred Stock 'BBB-' (Triple-B-Minus) 'BB' (Double-B)
Commercial Paper 'D-2' (D-Two) 'D-3' (D-Three)
Conseco Financing Trust I through VII
Preferred Securities 'BBB-' (Triple-B-Minus) 'BB' (Double-B)
Conseco Finance Corp.
Senior Debt 'BBB' (Triple-B) 'BB+' (Double-B-Plus)
Conseco Home Equity Loan Trust Certificates
Series 1999-H Class B-2
Certificates 'BBB' (Triple-B) 'BB+' (Double-B-Plus)
Series 2000-A Class BV-2
Certificates 'BBB' (Triple-B) 'BB+' (Double-B-Plus)
Series 2000-B Class BF-2
Certificates 'BBB' (Triple-B) 'BB+' (Double-B-Plus)
Manufactured Housing Senior/Subordinated
Pass Through Certificates
Series 1992-1 Class B
Certificates 'BBB' (Triple-B) 'BB+' (Double-B-Plus)
Series 1992-2 Class B
Certificates 'BBB' (Triple-B) 'BB+' (Double-B-Plus)
Series 1993-1 Class B
Certificates 'BBB' (Triple-B) 'BB+' (Double-B-Plus)
Series 1993-2 Class B
Certificates 'BBB' (Triple-B) 'BB+' (Double-B-Plus)
SOURCE Duff & Phelps Credit Rating Co.
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Related links:
http://www.dcrco.com
CONTACT:
Julie A. Burke, CPA, CFA, 312-368-3158,
burke@dcrco.com, or Peter F. Patrino, CFA, 312-368-3266,
patrino@dcrco.com, or Brian P. Quinn, 312-368-5464,
quinn@dcrco.com, or Jonathan N. Kingsepp, CPA, 312-368-3120,
kingsepp@dcrco.com, all of DCR
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