Dealers said there has been more interest in Conseco's director and officer loans since the details of the company's reorganization plan have emerged. The interest has been drummed up by revelations that the $480 million of D&O loans will be treated in a similar way to the company's $1.5 billion revolver in the company's emergence from bankruptcy. "There are buyers of the revolver around 70 and buyers of the D&O loans around 68," noted one trader.
The loans had traditionally priced anywhere from two to 10 points lower than the revolver, explained another trader. The D&O loans continue to be quoted off due to fleeting skepticism that before the deal is set in stone, some additional impairment could occur. No trades of either the revolver or the D&O loans could be confirmed. When the company began to fall down the slope to bankruptcy last summer, Mark Lubbers, Conseco spokesman, said efforts to extend the maturities of certain D&O loans expiring at the end of 2003 were causing the company grief. "If we could extend the maturity out two years, then all of our troubles go away," Lubbers said (LMW, 7/22).