CHICAGO, May 19 /PRNewswire/ -- Duff & Phelps Credit Rating Co. (DCR) has
lowered the ratings related to Conseco Inc. (Conseco). These ratings remain on
Rating Watch -- Down. The ratings are listed below.
The rating actions reflect Conseco's disclosure that additional provisions
of approximately $100 million may have to be established in the second quarter
related to its director and officer loan program. The estimate is based on the
decline in the value of Conseco common stock since the end of the first
quarter and the most current information regarding the creditworthiness of the
participants.
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.
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.
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 $55.5 billion and shareholders' equity of $6.3 billion
(excluding FAS 115) at March 31, 2000. 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. 'A' (Single-A) 'A-' (Single-A-Minus)
Conseco Annuity Assurance Co. 'A' (Single-A) 'A-' (Single-A-Minus)
Conseco Direct Life Insurance
Co. 'A' (Single-A) 'A-' (Single-A-Minus)
Conseco Health Company 'A' (Single-A) 'A-' (Single-A-Minus)
Conseco Life Ins. Co. 'A' (Single-A) 'A-' (Single-A-Minus)
Conseco Life Ins. Co. of
New York 'A' (Single-A) 'A-' (Single-A-Minus)
Conseco Medical Ins. Co. 'A' (Single-A) 'A-' (Single-A-Minus)
Conseco Senior Health Ins. Co. 'A' (Single-A) 'A-' (Single-A-Minus)
Conseco Variable Insurance Co. 'A' (Single-A) 'A-' (Single-A-Minus)
Manhattan National Life Ins. Co. 'A' (Single-A) 'A-' (Single-A-Minus)
Pioneer Life Insurance Co. 'A' (Single-A) 'A-' (Single-A-Minus)
Conseco, Inc.
Senior Debt 'BBB-' (Triple-B-Minus) 'BB' (Double-B)
Preferred Stock 'BB' (Double-B) 'B+' (Single-B-Plus)
Commercial Paper 'D-3' (D-Three) 'D-4' (D-Four)
Conseco Financing Trust I through VII
Preferred Securities 'BB' (Double-B) 'B+' (Single-B-Plus)
Conseco Finance Corp.
Senior Debt 'BB+' (Double-B-Plus) 'BB-' (Double-B-Minus)
Conseco Home Equity Loan Trust Certificates
Series 1999-H Class B-2 Ctfs. 'BB+' (Double-B-Plus) 'BB-' (Double-B-Minus)
Series 2000-A Class BV-2 Ctfs. 'BB+' (Double-B-Plus) 'BB-'(Double-B-Minus)
Series 2000-B Class BF-2 Ctfs. 'BB+' (Double-B-Plus) 'BB-'(Double-B-Minus)
Manufactured Housing Senior/Subordinated
Pass-Through Certificates Series 1992-1
Class B Ctfs. 'BB+' (Double-B-Plus) 'BB-'(Double-B-Minus)
Series 1992-2 Class B Ctfs. 'BB+' (Double-B-Plus) 'BB-' (Double-B-Minus)
Series 1993-1 Class B Ctfs. 'BB+' (Double-B-Plus) 'BB-' (Double-B-Minus)
Series 1993-2 Class B Ctfs. 'BB+' (Double-B-Plus) 'BB-' (Double-B-Minus)
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, Peter F. Patrino, CFA, 312-368-3266,
patrino@dcrco.com, Brian P. Quinn, 312-368-5464, quinn@dcrco.com,
both of Duff & Phelps
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