After announced that it may file for bankruptcy, Conseco has been delisted by the New York Stock Exchange. The companys stock closed on Aug. 8 at $0.34. News of the company, including second quarter financial reports and restructuring plans, sparked a sell-off.
Although CEO Gary Wendt has vigorously defended the companys restructuring efforts and denied talk of bankruptcy, Consecos decision to use a 30-day grace period to pay back loans sparked downgrades of both the holding companys debt and the financial stability of its subsidiary insurers.
Weiss Ratings has all of the Conseco insurance companies rated at E+, which is very unstable and indicates a high solvency risk. However, not all analysts are as pessimistic, and some have said that the life insurance companies are financially sound. Nevertheless, the condition of the holding company continues to affect its subsidiaries.
Even before the most recent rash of downgrades, Consecos fixed annuity distribution in the bank channel was dismantled because of the companys inability to sell B-rated products in such a conservative marketplace.
Now, Conseco may have to lower the price for Conseco Variable Insurance Co. According to one source, since the most recent news about Conseco broke, the price invivia had committed to pay to acquire the company has dropped.