Conseco `Restoration Plan' Moves Forward; Company and Banks Close on Debt Restructuring; Debt to Be Cut by $3 Billion Over 3 Years.

Business Editors

INDIANAPOLIS--(BUSINESS WIRE)--Sept. 22, 2000

Conseco, Inc. (NYSE:CNC) today announced that its lender banks have signed amendments that will restructure the company's credit facilities.

The restructuring of this debt is a key component of the "Restoration Plan" initiated by Gary C. Wendt after he joined Conseco on June 29 as Chairman and CEO.

The agreement with the banks covers $2.8 billion of debt held by a 25-bank consortium led by Bank of America and Chase Manhattan Bank.

Wendt called the terms of the debt restructuring important news, but said, "the larger story here -- what we call the Conseco Restoration Plan -- is the complete re-engineering of the company's financial structure. We are executing a plan that provides long term stability and flexibility for our capital structure."

Over the past four years, Conseco's bank and public debt had increased to approximately $5.9 billion. The Restoration Plan calls for reducing the company's debt by more than $3 billion by year-end 2003, reducing Conseco's debt from 41% of total capital to less than 25%. More importantly, the Restoration Plan allows Conseco to meet its debt obligations and improve its capital structure dramatically without impacting its core businesses.

The beginning elements of the Conseco Restoration Plan center around two initiatives: (1) selling non-strategic assets of the company, and (2) restructuring the operations of Conseco Finance. These initiatives to generate cash were implemented by Wendt soon after his arrival at Conseco; they have proceeded ahead of schedule.

Over the next three years, these two cash-generating components of the Restoration Plan are designed to enable Conseco to repay $1.52 billion in bank debt and $1.56 billion in public debt.

To begin the debt reduction program the company has identified more than $2 billion in assets to be sold or monetized. More than $700 million of proceeds from these activities have already been realized; total proceeds are expected to exceed $1 billion by year-end 2000.

The initial stages of the restructuring of Conseco Finance operations were announced on July 27. That plan, designed to assure stable growth, included the lay-off of 2000 employees and over $150 million in annual expense reductions.

Major elements of the Restoration Plan, including terms of the bank debt restructuring, include:

-- Payment of $650 million in bank debt on September 22, 2000;

-- Payment of 2001 and 2002 public debt as scheduled ($131 million in December
2000 and $668 million in June 2001);

-- Extension of $571 million of bank debt to December 31, 2001 funded by the
sale of non-strategic assets;

-- Payment of 2003 and 2004 public debt as scheduled ($450 million in October
2002 and $310 million in February 2003);

-- On $1.5 billion of bank debt previously due September 2003, payments of $150
million in each of 2002 and 2003, with an option to extend the remaining $1.2
billion to 2005;

-- Extension to December 2003 of the $570 million of loans and related Conseco
guarantees comprising the Conseco directors and officers stock purchase program
(to qualify for the loan and guarantee extensions, borrowers will be required
to enter into a revised lending program, which will be finalized in the 4th
quarter);

-- Suspension of the dividend on Conseco common stock beginning in the current
quarter (providing approximately $18 million per quarter toward the financial
restructuring);

Wendt said that winning back top-drawer insurance and debt ratings would be the next step in the Restoration Plan. "With a stable and flexible financial structure in place, we can turn our full attention to building consistently profitable business operations."

World Wide Web    http://www.conseco.com
Investor Hotline  800.4.CONSECO
Fax-on-Demand     800.344.6452

Note on forward-looking statements: All statements, trend analyses and other information contained in this release and elsewhere (such as in filings by Conseco with the Securities and Exchange Commission, press releases, presentations by Conseco or its management or oral statements) relative to markets for Conseco's products and trends in Conseco's operations or financial results, as well as other statements including words such as "anticipate," "believe," "plan," "estimate," "expect," "intend," "will," "should," "could," "goal," "target," "on track," "comfortable with," "optimistic" and other similar expressions, constitute forward-looking statements under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors which may cause actual results to be materially different from those contemplated by the forward-looking statements. Such factors include, among other things: (1) general economic conditions and other factors, including prevailing interest rate levels, stock and credit market performance and health care inflation, which may affect (among other things) Conseco's ability to sell its products, its ability to make loans and access capital resources and the costs associated therewith, the market value of Conseco's investments, the lapse rate and profitability of policies, and the level of defaults and prepayments of loans made by Conseco; (2) Conseco's ability to achieve anticipated synergies and levels of operational efficiencies; (3) customer response to new products, distribution channels and marketing initiatives; (4) mortality, morbidity, usage of health care services and other factors which may affect the profitability of Conseco's insurance products; (5) performance of our investments; (6) changes in the Federal income tax laws and regulations which may affect the relative tax advantages of some of Conseco's products; (7) increasing competition in the sale of insurance and annuities and in the finance business; (8) regulatory changes or actions, including those relating to regulation of financial services affecting (among other things) bank sales and underwriting of insurance products, regulation of the sale, underwriting and pricing of products, and health care regulation affecting health insurance products; (9) the outcome of Conseco's efforts to sell assets and reduce, refinance or modify indebtedness and the availability and cost of capital in connection with this process; (10) actions by rating agencies and the effects of past or future actions by these agencies on Conseco's business; and (11) the risk factors or uncertainties listed from time to time in Conseco's filings with the Securities and Exchange Commission.