Conseco Gets Positive Outlook From Moody's

NEW YORK (AP) — Analysts at Moody's Investors Services on Wednesday boosted the outlook for insurer Conseco Inc. to positive from negative, citing the company's efforts to pay down debt and boost capital.

Shares of Conseco soared to a new 12-month high after it announced the debt reorganization and capital plans. They included raising $200 million through a general stock offering in addition to $78 million through a stock and warrant purchase agreement with Paulson & Co. Inc., an employee-owned hedge fund sponsor. Conseco also privately placed $293 million of 7 percent convertible senior debentures due 2016 and will use the proceeds to tender existing 3.5 percent convertible debentures due next year.

Shares surged $1.33, or 27 percent, to $6.32 and set a 52-week high of $6.48 earlier. They've traded as low as 26 cents in the past year.

Analysts had said Conseco needed to find a solution to its $293 million in debt due in Sept. 2010, with one saying in April that the company might have to seek bankruptcy protection if unable to do so.

They viewed the plans positively with Credit Suisse analyst Thomas Gallagher saying it's a "significant positive step in restoring the company's focus towards its core insurance operations."