Conseco Yield Spreads Tighten On News of Four Acquisitions
May 10, 2011
Spreads on Conseco's 8 1/8 % senior notes due in 2018 tightened by 0.03 percentage point to a spread of 1.28 percentage points above Treasurys. On Monday, the spreads had tightened by 0.07 percentage point after the Carmel, Ind., company said it would buy two competitors and the remainder of two companies in which it already holds interests. Debt analysts said they saw the purchases as mild positives for Conseco's credit. Jeana Fish, Salomon Brothers Inc. financial-services analyst, said the bonds have a notable upside, based on expectations that Moody's Investors Service will raise its junk Ba2 rating on Conseco's senior debt to investment-grade status in six to 12 months. Moody's confirmed Conseco's ratings and reaffirmed its positive outlook. Conseco carries an investment-grade triple-B rating from Standard & Poor's.
