Conseco Inc. Universal Shelf Rated BBB/BBB- by S&P.NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 6/6/97-- Standard & Poor's today has assigned its preliminary triple-'B'/triple-'B'-minus rating to Conseco, Inc.'s $1.5 billion universal shelf filing. The ratings reflect Conseco's good business profile, continued shift to an operating strategy more like that of a traditional insurance holding company, and its financial strategy, which is designed to maintain debt leverage at or below 35% at all times with a combined debt plus preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. to 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. ratio of no more than 46%. The ratings also reflect the company's continued good operating performance and good debt and fixed-charge coverage fixed-charge coverage The number of times that a firm's operating income exceeds its fixed payments. Fixed-charge coverage is a measure of a firm's ability to meet contractually fixed payments, with high coverage indicating significant flexibility for making levels. These factors are offset by Conseco's somewhat significant financial leverage and active acquisition strategy. Conseco's debt to capital ratio is approximately 26%, preferred to capital is around 12%, double leverage is approximately 1.1 times (x), and fixed-charge coverage during 1997 is expected to be around 4.5x. All of these ratios are supportive of the current ratings. OUTLOOK: Stable. Although debt leverage has been reduced during the past 18 months, the company's tolerance is significantly higher than the current level, and management has a publicly stated target range for future acquisitions of anything up to $2 billion. However, Standard & Poor's anticipates combined debt and preferred stock will not exceed 46% of Conseco's total capitalization Total capitalization The total long-term debt and all types of equity of a company that constitutes its capital structure. total capitalization See capitalization. . Additionally, for 1997, management has committed to reducing annual overhead expenses by $80 million and integrating its 150,000 agents into one consolidated distribution system. Operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before are expected to be at least $550 million. -- CreditWire CONTACT: Jon Reichert, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of (1) 212-208-1775 Jacob L Schlanger, New York (1) 212-208-1619 |
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