Published on 9/28/2010 in the Prospect News High Yield Daily.
New Issue: HealthSouth prices upsized $525 million of eight-, 12-year notes
By Paul A. Harris
St. Louis, Sept. 28 - HealthSouth Corp. priced an upsized $525 million two-part offering of senior notes (B2/B+/) on Tuesday, according to an informed source.
The Birmingham, Ala.-based provider of inpatient rehabilitative health care services priced an upsized $275 million tranche of eight-year notes at par to yield 7¼%.
The tranche, which was upsized from $250 million, priced at the tight end of the 7 3/8% area price talk.
The company also priced a $250 million tranche of 12-year notes at par to yield 7¾%.
The yield on the 12-year notes printed on top of the price talk.
Citigroup Global Markets Inc. was the left bookrunner for the deal, the overall size of which was upsized from $500 million.
Bank of America Merrill Lynch, Barclays Capital Inc., Goldman Sachs & Co. and Morgan Stanley & Co. Inc. were the joint bookrunners.
Proceeds, together with cash on hand, and borrowings under the company's revolving credit facility, will be used to repay amounts outstanding under both tranches of the company's term loan B.
| Issuer: | HealthSouth Corp.
|
| Amount: | $525 million, increased from $500 million
|
| Securities: | Senior notes
|
| Left bookrunner: | Citigroup Global Markets Inc.
|
| Joint bookrunners: | Bank of America Merrill Lynch, Barclays Capital Inc., Goldman Sachs & Co., Morgan Stanley & Co. Inc.
|
| Co-managers: | J.P. Morgan Securities Inc., RBC Capital Markets Corp., SunTrust Robinson Humphrey Inc., Wells Fargo Securities
|
| Trade date: | Sept. 27
|
| Settlement date: | Oct. 7
|
| Ratings: | Moody's: B2
|
| Standard & Poor's: B+
|
| Distribution: | SEC registered
|
| Marketing: | Quick to market
|
|
|
| Eight-year notes
|
| Amount: | $275 million, increased from $250 million
|
| Maturity: | Oct. 1, 2018
|
| Coupon: | 7¼%
|
| Price: | Par
|
| Yield: | 7¼%
|
| Spread: | 514 bps
|
| Call features: | Make-whole call at Treasuries plus 50 bps until Oct. 1, 2014, then callable at 103.625, 101.813, par on and after Oct. 1, 2016
|
| Special call: | Up to 10% of the issue callable annually at 103 during the non-call period
|
| Equity clawback: | 35% at 107.25 until Oct. 1, 2013
|
| Change-of-control put: | 101%
|
| Price talk: | 7 3/8% area
|
|
|
| 12-year notes
|
| Amount: | $250 million
|
| Maturity: | Sept. 15, 2022
|
| Coupon: | 7¾%
|
| Price: | Par
|
| Yield: | 7¾%
|
| Spread: | 529 bps
|
| Call features: | Make-whole call at Treasuries plus 50 bps until Sept. 15, 2015, then callable at 103.875, 102.583, 101.292, par on and after Sept. 15, 2018
|
| Special call: | Up to 10% of the issue callable annually at 103 during the non-call period
|
| Equity clawback: | 35% at 107.75 until Sept. 15, 2013
|
| Change-of-control put: | 101%
|
| Price talk: | 7¾% area
|
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