Conseco Inc. renegotiated terms for repaying $1.5 billion of bank debt, another step in efforts by the troubled insurance and loan firm to satisfy rating agencies it can pay back debts due this year.
Conseco's stock rose 16 cents, or 4%, to $3.76 on the NYSE.
Banks agreed to lower Carmel, Ind.-based Conseco's liquidity requirement to $50 million from $100million, and dropped an agreement that forced it to allocate 50% of proceeds from asset sales to paying off bank debt.
In return, the banks raised interest rates on the bank debt for Conseco by three-quarters of a percentage point to 3.25% above LIBOR, the standard rate at which banks lend to each other.
Conseco is scrambling to sell assets to meet bond and bank debt repayments due this year.
Overall, Conseco has about $6billion of debt, run up after its disastrous purchase of loan firm Green Tree Financial four years ago.
Concerned about the firm's financial fragility, rating agency Moody's Investors Service has warned it will downgrade the firm's debt rating unless it can show by the end of March it can meet its debts due this year.