A $6-8 million piece of Conseco traded this week at 66, up roughly six points from where the levels had come to rest over the last month. Traders said the name moved up with the likelihood that a reorganization plan would successfully be completed. One trader noted that there is increased interest in the name with more distressed buyers looking to move in on the paper. Repeated calls to Eugene Bullis, cfo, and a company spokesman were not returned by press time.
Conseco has been pursuing a more aggressive plan of reorganization since last summer. Most recently, the company received an extension from lenders for its existing forbearance agreement for both its $1.5 billion of outstanding bank debt and $540 million of directors and officer loans. Market sources said there was disagreement over the amount of recovery that should be allocated to the holders of the directors and officer loans. The forbearance agreement now expires on Jan. 11.