Conseco Inc's MOPPRS & Sr Nts Asgnd BBB Rtg by S&P.NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 6/9/98-- Standard & Poor's today assigned its triple-'B' rating to Conseco Inc.'s $550 million mandatory par put remarketed securities (MOPPRS) due 2011 and $250 million senior notes due 2005. Proceeds will be used to reduce the company's outstanding commercial paper borrowings. The ratings reflect the following: -- As of March 31, 1998, Conseco's debt/capital was 30% and preferred/capital was 20%. Adjusting for the acquisition of Green Tree Financial Corp., Conseco's pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma year end 1998 debt/capital is expected to be 26%, preferred/capital will be 17%, double leverage will be 120%, and fixed charge coverage is expected to be over 4 times (x), all of which support the current ratings. Standard & Poor's believes management remains committed to keeping debt/capital at or below 35%. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Standard & Poor's capital model, capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. for the Conseco group of life insurance companies is excellent, with a capital adequacy ratio Capital adequacy ratio (CAR), also called Capital to Risk (Weighted) Assets Ratio (CRAR)[], is a ratio of a bank's capital to its risk. National regulators track a bank's CAR to ensure that it can absorb a reasonable amount of loss. of over 150% as of year end 1996; -- With $5.4 billion in collected premiums during 1997, Conseco is now one of the largest companies in the life insurance industry, and maintains a leading marketshare position with many of its product offerings. With its recent life/health insurance acquisition activity, the company has evolved away from being primarily a fixed annuity Fixed Annuity An insurance contract in which the insurance company makes fixed dollar payments to the annuitant for the term of the contract, usually until the annuitant dies. The insurance company guarantees both earnings and principal. writer, with premium volume now derived mostly from individual life insurance (16%), medicare supplement (15%), long-term care long-term care (LTC), n the provision of medical, social, and personal care services on a recurring or continuing basis to persons with chronic physical or mental disorders. (12%), and fixed annuities Fixed annuities Contracts in which an insurance company or issuing financial institution pays a fixed dollar amount of money per period. (28%); -- Conseco has a track record of producing very strong earnings. According to Standard & Poor's earnings model, the company's earnings adequacy ratio is over 400%, reflective of the expense efficiencies Conseco continues to recognize through its consolidation activities and pricing discipline. With the addition of Green Tree, Conseco's earnings are anticipated to be derived from consumer finance (31%), supplemental health (24%), life insurance (21%), and annuities (17%); and -- Conseco's management is clearly committed to maximizing shareholder value. While Standard & Poor's believes that the company will continue to be a leader in the consolidation of the life insurance industry, management has recently shifted its attention to focus more on the operations of its insurance units, in terms of melding the various operations and distribution channels, and in terms of generating more growth internally. The Green Tree transaction further extends the company's product line-up, which has been occurring over the past two years as the company has begun offering supplemental health, long-term care, and cancer insurance, in addition to its retirement annuities and life insurance products. OUTLOOK: STABLE Standard & Poor's anticipates Conseco will continue to generate strong profitability, capitalization at the holding company and its operating units operating unit A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon will remain supportive of its ratings, and management will continue to be opportunistic opportunistic /op·por·tu·nis·tic/ (op?er-tldbomacn-is´tik) 1. denoting a microorganism which does not ordinarily cause disease but becomes pathogenic under certain circumstances. 2. in evaluating potential acquisition/merger candidates. -- CreditWire
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