Aug.30 ,2000 CNC REVIEW and NEWS
Today The StretCom came out with the news of
refinancing deal:
Yesterday CNC had a great 10% rally.
We are still in the Pac-Man Squeeze mode:
pac-pac
gobble-gobble
squueze-squeeze
stock's up
Don't Sell
Put shares in your name , OFF street name
and......repeat
pac-pac
gobble-gobble
squueze-squeeze
stock's up
Don't Sell
Put shares in your name , OFF street name
.
.
.
TheStreet.com 8/29/00 7:58 PM Conseco Near a Deal to Extend Loans
thestreet.com
By Peter Eavis Senior Writer8/29/00 7:58 PM ET
TheStreet.com 8/29/00 7:58 PM
Conseco Near a Deal to Extend Loans
Conseco (CNC:NYSE - news) is getting a break from its lenders.
The troubled insurance and finance firm is close to finalizing
an agreement with its bank creditors
that allows it to extend half of the $1.4 billion
in debt that falls due by the end of September,
according to a person familiar with the situation.
This person said the banks will get paid back around
$700 million by the end of September, and they have agreed
to extend their deadline on the remainder.
Conseco declined to comment on its negotiations with its
bankers.
Boost for CEO
The purported debt workout would be a boost to Gary Wendt,
the ex-GE Capital exec appointed as Conseco's CEO in June
to head up restructuring efforts.
But it wouldn't mean Conseco's troubles are over.
The person with knowledge of the debt talks declined to say
what concessions the banks, which include Bank of America
(BAC:NYSE - news) and Chase (CMB:NYSE - news),
have demanded in return. If these turn out to be harsh,
investors would likely conclude that the Carmel, Ind.-based
company has only won a temporary reprieve from its
creditors. This person also didn't say how Conseco had
raised the $700 million for repayments.
He says the company could make an announcement about
its debt by the end of next week.
Neither Bank of America nor Chase returned calls seeking
comment. Conseco alluded to its negotiations with bankers
in a recent Securities and Exchange Commission filing.
That filing also gave details of an agreement with Lehman
Brothers (LEH:NYSE - news) that requires Conseco to get
Lehman's permission before it spends the proceeds from planned
asset sales by Conseco Finance, Conseco's lending
arm. Lehman insisted on the restriction after it agreed in May
to provide financial assistance to the company and help
its restructuring.
As part of the recent debt negotiations, Lehman,
which didn't comment, has agreed to relax these restrictions,
according to the person familiar with the talks.
Conseco hopes the asset sales will raise $2 billion over
the next 12 to 15 months.
Optimism
Conseco's stock soared Tuesday, closing up 69 cents, or 9.1%, to $8.25.
Optimism over Wendt's leadership has lifted the stock
over 80% from its 52-week low of $4.50,
though it languishes about 70% below its 52-week high.
It was unlikely that the banks would force Conseco into
default so soon after Wendt's arrival, but their tolerance
for further exposure will be revealed in the terms of the
supposed $700 million in new loans, if the company chooses
to reveal them. "I always thought they would sort this
thing out," says Kathy Shanley, analyst at Gimme Credit,
which doesn't do underwriting. To properly assess the
banks' stance, it's necessary to know the term of the new
loans, their interest rates, whether the banks obtained
collateral for their loans and whether the banks have been paid
large fees for the extensions. Lehman received a
massive $90 million in fees and warrants for its efforts.
The $1.37 billion of debt that could fall due by the end of
September include:
a $155 million bank credit facility due
on Sept. 2000;
a $766 million bank facility due on Sept.22;
$50 million of commercial paper due on Sept. 22;
$144 million in employee stock purchase loans;
and $250 million of notes that the lender could have
demanded be repaid in August.
Pricey Deal
Conseco got into trouble under the stewardship of
Stephen Hilbert, the flamboyant CEO who left in May.
In 1998, Hilbert decided to purchase the big mobile home
lender Green Tree, renamed Conseco Finance, at a price
many felt exorbitant. High growth at Green Tree was fueled
by increased borrowings, which the company is now
struggling to pay off. Conseco's insurance operations also
have problems. Conseco reported a loss of $405 million in the
second quarter, more than reversing the year-earlier
profit of $213 million. It also faces around $700 million
in debt repayments in 2001.
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DLJ has a big position in cnc as of 6-30-2000 and
is UP 429% from previous Q.
insidertrader.com
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CNC Preferred Stock up 10% today:
ragingbull.altavista.com
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Subprime Mortgage Business = good: GM enters in:
biz.yahoo.com
Monday August 28, 3:28 pm Eastern Time
GMAC-RFC allies with subprime mortgage lender
NEW YORK, Aug 28 (Reuters) - GMAC Residential Funding Corp. on Monday
announced a strategic alliance with Mortgage Lenders Network USA,
a leading wholesale lender of subprime mortgages.
GMAC-RFC said in a printed statement that it will provide MLN with a
committed warehouse lending facility and revolving line of credit while MLN will deliver subprime mortgages to
Gmac-rfc.
GMAC said the alliance will allow MLN to participate in GMAC-RFC's subprime
mortgage securitization programme while pursuing its business strategy of
becoming a top subprime mortgage originator.
In addition, the company said, convertible debt issued to GMAC-RFC will enable
GMAC to share in MLN's future success.
Founded in 1996, Mortgage Lenders Network USA is a leading wholesale lender
and loan servicer focused on subprime mortgage brokers and bankers throughout the United States.
GMAC-RFC, a wholly owned subsidiary of General Motors Acceptance Corp.
is America's largest non-agency issuer of mortgage-backed securities and the
No. 1 U.S. warehouse lender. General Motors Acceptance Corp. is in turn a unit
of U.S. automaker General Motors Corp. (NYSE:GM - news).
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CNC Sleuth Reporting
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messages.yahoo.com
8/29/00 2:55 pm
Msg: 69184 of 69323
Faber Report Faber reporting (old, today news) about
CSFB looking at DLJ as a possible
purchase....the real line,
AXA owns DLJ, is looking to unload it to get out of brokerage
business and TO CONCENTRATE ON ITS CORE INSURANCE OPERATIONS,
ESPECIALLY MORE ACQUISITIONS IN THE U.S..
...hmmm,I think that I might be smelling shortys on Gary Wendt's Labor Day barbecue
, while he muses with the AXA guys about rolling CNC into AXA......happy hunting.....any (intelligent) comments?
by: puck_in_st_pete
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Technical Analysis
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WALL STREETCITY
host.wallstreetcity.com
BARCHART
quotes.barchart.com
TA
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Addendum:
The Original PAC-MAN Short_Squeeze Strategy remains intact and in force
Message 14284021
Previous REFERENCE REVIEW MATERIAL ON CNC GO TO:
Message 14268172
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PS If you click on my previous post you can go back
all the way to my very first post 7 weeks ago!! |
