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Non-Tech : Conseco Insurance (CNO) -- Ignore unavailable to you. Want to Upgrade?

To: AK2004 who wrote (3499)	10/9/2000 7:05:31 PM
From: AustinPowersIII	Read Replies (1) \| Respond to of 4155

IRWIN JACOBS " NEW" #5 Irwin Jacobs letter to shareholders no. 5 Dated: October 9, 2000 In response to my comments regarding Conseco posted to this Web site on October 5, 2000, I received the following letter, which I thought would be of particular interest to you: “Dear Irwin: As holders of Conseco common and preferred stock as well as Conseco bonds, we very much appreciate the time and effort you have put forth to help put some “balance” (as you say it) in the negative informational barrage on Conseco. It might be interesting to ask some of those who claim to be so well informed why the company (Conseco) recently paid the dividend on its trust-preferred securities (almost $50 million per quarter) if it was in such financial difficulty. And furthermore, why did the banks allow it to be paid under the new bank agreement if the company’s assets or financial prospects were so poor. We have every confidence in Gary Wendt and in his ability to achieve a better value for the assets of Conseco in the months ahead. Thank you again for doing your part to keep the landscape from being buried in negative misinformation." The individual who wrote this letter is a Vice-President of a large investment management company that is one of Conseco’s largest shareholders. This individual brought out a very important fact that frankly I should have referred to in my last message. The fact is, although Conseco, at its option pursuant to its indenture agreements on its public debt, has the right to forego paying the dividend in cash on this public debt for up to five years without a penalty, the banks are allowing Conseco to pay approximately $200 million per year in cash dividends on this public debt. (Don’t confuse the dividend on the public debt with the dividend on the common stock, which was deleted). What banks would ever allow any company to pay a $50 million per quarter dividend ahead of them if they didn’t believe in the company’s management and their ability to deliver on their business plan? Although the approximately $200 million per year of dividends is a significant amount of money, I believe even more significant is the optimism and support the banks have for Gary Wendt and Conseco by allowing the dividend to be paid ahead of their loans.