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To: Follies who wrote (150410)	2/9/2002 8:39:35 AM
From: broadstbull	Read Replies (1) \| Respond to of 436258

Peter Eavis...More on Lehman's Conseco deal 2/09/02 12:01 AM ET So why on earth would Lehman do this? First, Lehman appears to get earlier payment of about $90 mm. In addition, Lehman gets to swap its right to $50 mm of stock in the finance sub for $50 mm preferred convertible stock in the parent company, and it can sell this preferred stock possibly as early as next year. In other words, its claim on the company's assets is now higher than that of common stock holders. But it is still below senior debt holders. They appear to guarding against the possibility of a bankrutcy. They could always have taken more common stock as a payback, after all. Lehman is substantially exposed to Conseco. It's motivation for doing this has to be to keep a large debtor afloat. Nothing, repeat nothing, in Conseco's basic business appears to be going right -- so the bank, in my view, is merely sustaining a dud for another 12 months. In fact, the things bankers will do avoid booking losses is sometimes laughable. One is reminded of those of the reports in December of Lehman calling Moody's allegedly appealing to the rating agency to not downgrade Enron! What were these guys thinking then, and what are they thinking now? Also, unrelatedly, I am eager to see if Conseco will have to write off some interest income it has already booked due as part the Trump real estate deal. This was hinted at in the Trump press release Thursday. The regulators will not be happy if Conseco has been booking income it shouldn't have. I am sure we won't have heard the last of this little dispute. Remember: Before Enron, there was Conseco. Only Conseco still lives. Just. None Peter Eavis Lehman rolls over for Conseco 2/08/02 11:59 PM ET Lehman flings Conseco a lifeline, the latest in a long line of "last-ditch" cures this wretched company has been given over the past 2 years . So what's happened? A Conseco 8K filed late Friday says Lehman, Conseco's loyal banker, has agreed to extend some debt maturities, expand a credit line by $50 million and allow Conseco's bad-debt-laden finance sub to carry less cash-in-hand, which frees up some cash. While nothing is ever what it seems at Conseco, these concessions, on the face of it, are a big (short-term) positive for Conseco. They make it easier for CNC to meet debt obligations falling due this year. The stock will no doubt rally on this Monday -- fiercely. However, Lehman's decision to roll over proves the bears' liquidity analysis was correct; it says Conseco almost certainly wouldn't have made it through the next 6 months without these concessions. As a result, the mind boggles to think how bad cash flows will be from the insurance businesses and the finance sub as more and more people fail to pay back loans to Conseco. Of course, we shall see how ugly fundamentals are when Conseco files its Q4 numbers. Yep, they still haven't done that. All indications are that they will be gruesome. None