In the works, Conseco Inc., whose first quarter earnings report was due Friday of last week, is said to be readying a deal, set for premarketing this week.

The deal, if launched, will likely be approximately half the size of Conseco's last $1 billion transaction.

"They're talking to people about subordinated debt," a source said. "That's very interesting. I read that as positive. Because if the news [on earnings] isn't good, they'd have to be very worried about coming to market."

The source suggested that Conseco would tap the market to keep its warehouse lines freed up, as well as maintain its market credibility.

Details beyond that were unavailable.

Of significance, the rumor that G.E. Capital is looking to buy Green Tree, the manufactured-housing and home-equity business of Conseco, evolved: sources indicate G.E. could be considering the purchase of not just Green Tree but Conseco itself.

"Why stop at Green Tree," a source said. "Let's face it, the market value of Conseco right now is about $2 billion. If you pay a 50% premium, you can own the company for $3 billion, plus assumed debt."

Apart from Conseco, the asset-backed market showed moderate activity last week, though longer-term pieces of bonds still met with investor resistance and traded wide, said market sources.

Specifically, the longer-term classes of Onyx Acceptance Corp.'s $450 million deal were pushed out 4 basis points, according to published reports.

"It kind of reflects the whole thing that's going in the market right now, after you pass two years, it gets a little squishy," a trader said.

From the credit-card sector, American Express priced a $905 million floater. The deal, which managed by Salomon Smith Barney, was structured in two parts. A 5.0-year, $825 million A-class, rated triple-A, priced at 16 basis points over the one-month Libor, while a 5.0-year, $80 million, B-class, rated single-A, priced at 35 points over the one-month Libor.

"The fact that the B-piece of the Amex deal got done at 35, which is only 19 points behind the senior piece, that's a little aggressive," a trader said. "It shows there's a lot of support for the subordinate pieces. A little market value."

"One thing going on that's interesting, is that floating is 10 cheap to six, on a swap basis," said one market watcher. "Despite that, they continue to shoot."

The liabilities are floating, and, assuming the assets are floating, the issuers think, under the current market conditions, its worth pricing 10 points wider and issuing floating-rate paper, the source said.

At press time, DVI Equipment Receivables was said to be prepping a deal.

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