Seemingly forever cleansing its balance sheet, Conseco Finance is near securitizing up to $1 billion of its private-label credit card portfolio, which, in its entirety, is worth approximately $3.9 billion, according to the company's most recent earnings report.
While specifics on the transaction are as of yet vague, a source confirmed Conseco has been in talks with Credit Suisse First Boston concerning the securitization of the portfolio.
CSFB recently managed the $400 million Federated Department Stores deal, also backed by a private-label credit card portfolio.
The Conseco portfolio is related to a business Green Tree Financial Corp. (acquired by Conseco in 1998) began in 1996. Since then Green Tree has been providing store credit cards to customers of Menard's, a chain of home improvement stores located in the Midwest.
According to a filing with the Securities & Exchange Commission, Conseco has entered into similar agreements with numerous other merchants, as well as acquiring existing private-label accounts. Conseco has been financing its portfolio via the private market and the commercial paper market, a source said.
Conseco's S-3 filing describes a senior subordinate transaction structured in four parts: publicly offered class-A through class-C notes, plus a series of D-class notes not offered in the prospectus.
Last year, Conseco issued securities backed by manufactured housing loans, home-equity loans, auto receivables, equipment leases, home improvement loans and recreational vehicle loans, for a total of $10 billion in proceeds, according to Thomson Financial Securities Data.