Conseco's bank debt traded up to the 101102 context last week, beginning with a flurry of paper changing hands in the 99 range. Dealers noted that the accrued interest on the bank debt as well as positive speculation of the value of the preferred equity, which lenders will receive as a part of their recovery package, caused the bank debt to climb over par. Investors have been aware of both factors for some time, but the name ticked up this week as the company draws closer to emerging from bankruptcy, a trader explained. One of the biggest issues in Conseco's bankruptcy case is the appropriate valuation assigned to the company. Under Conseco's fourth amended plan of reorganization, the Carmel, Ind.-based company contemplates a $3.8 billion valuation, explained a Conseco spokesman. The holders of Conseco's trust originated preferred securities allege that the company is worth more. Hearings on the matter have wrapped up and the parties were slated to file post-trial briefs last Friday. The spokesman said he expects the bankruptcy court judge to rule on the company's confirmation shortly after reviewing the briefs. Daniel Murphy, senior v.p. and treasurer of Conseco, could not be reached for comment.
Conseco Rallies Above Par