Conseco (CNO) Agrees to Sell up to $293M of 7% Convertable Senior Debentures Due 2016

October 14, 2009 9:43 AM EDT

Conseco, Inc. (NYSE: CNO) announced today that it has entered into an agreement to sell up to $293.0 million aggregate principal amount of its 7% Convertible Senior Debentures due 2016 in a private offering that is exempt from the registration requirements of the Securities Act of 1933, as amended. The 7% interst is payable on June 30 and January 30.

Conseco has been informed by the initial purchaser that Paulson & Co. Inc., on behalf of the several investment funds and accounts managed by it ("Paulson"), has entered into an agreement with the initial purchaser to purchase up to $200.0 million aggregate principal amount of the new convertible debentures.

The convertible debentures will not be convertible prior to June 30, 2013, except under limited circumstances. Commencing on June 30, 2013, the convertible debentures will be convertible into common stock at the option of the holder at any time, subject to certain exceptions, based on an initial conversion rate of 182.1494 shares of common stock per $1,000 principal amount of convertible debentures, which is equivalent to an initial conversion price of approximately $5.49 per share of common stock, which represents approximately a 10% premium to the closing sale price of the common stock on the New York Stock Exchange on October 13, 2009.

Conseco previously entered into a stock and warrant purchase agreement with Paulson to sell to Paulson 16.4 million shares of common stock and warrants to purchase 5.0 million shares of common stock for an aggregate purchase price of $77.9 million.

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• Paulson & Co. (PCI)

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