Extendicare tenders for all 9½% notes due 2010, 6 7/8% notes due 2014

By Laura Lutz

Des Moines, Sept. 22 - Extendicare Inc. subsidiary Extendicare Health Services, Inc. announced a tender offer and consent solicitation for all of its $150 million 9½% senior notes due 2010 and all of its $125 million 6 7/8% senior subordinated notes due 2014.

The company is soliciting consents to amend the note indentures to eliminate substantially all the restrictive covenants and some events of default. Holders who tender notes must also consent to the amendments.

The company will pay $1,050 for each $1,000 principal amount of 2010 notes tendered. The payout for the 2014 notes will be determined by pricing the notes to the first call date at 50 basis points over the bid-side yield on the 4.875% U.S. Treasury note due May 15, 2009 as of 2 p.m. ET on the price determination date.

Those payouts include a $30 consent fee for holders who submit tenders before the Oct. 5 consent deadline. Notes tendered after the deadline will not receive the consent fee.

The company will pay accrued interest up to but excluding the settlement date for both series of notes.

Settlement of the tender is contingent on receipt of consents from a majority of noteholders, on funding from the company's collateralized mortgage-backed securitization and on an amended or new revolving credit facility.

Lehman Brothers Inc. (800 438-3242 or collect 212 528-7581) will serve as dealer manager and solicitation agent. D.F. King & Co., Inc. (888 567-1626 or collect 212 269-5550) will act as information agent and tender agent.

Extendicare Health Services is a Milwaukee-based long-term health care provider.

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