By Paul A. Harris
St. Louis, June 9 - HealthSouth Corp. priced a $1 billion face amount of senior notes (B3/CCC+) in two tranches on Friday, according to a market source.
The Birmingham, Ala.-based nationwide provider of outpatient surgery, diagnostic imaging and rehabilitative health care services priced a $625 million tranche of 10¾% 10-year fixed-rate notes at 98.505 to yield 11%. The yield came 12.5 basis points wide of the 10¾% area price talk. The sale of the fixed-rate notes generated $615.656 million of proceeds.
The company also priced a restructured $375 million of eight-year floating-rate notes at par to yield six-month Libor plus 600 basis points, again 12.5 basis points wide of the Libor plus 575 basis points area price talk. Call protection on the floating-rate notes was increased to three years from two years.
The combined two-tranche sale generated $990.656 million of proceeds.
Merrill Lynch, JP Morgan and Citigroup were joint bookrunners for the notes, which were sold via Rule 144A with registration rights and via Regulation S. Deutsche Bank Securities, Goldman Sachs & Co. and Wachovia Securities were co-managers.
Proceeds along with proceeds from a $400 million convertible preferred deal priced in March will be used to refinance the $1.3 billion bridge loan incurred in February to fund a complete debt recapitalization of the company.
| Issuer: | HealthSouth Corp.
|
| Face amount: | $1 billion
|
| Proceeds: | $990.656 million (approximate)
|
| Security description: | Senior notes
|
| Bookrunners: | Merrill Lynch, JP Morgan, Citigroup
|
| Co-managers: | Deutsche Bank Securities, Goldman Sachs, Wachovia Securities
|
| Trade date: | June 9
|
| Settlement date: | June 14
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: CCC+
|
| Distribution: | Rule 144A with registration rights/Regulation S
|
|
|
| Fixed-rate tranche
|
| Face amount: | $625 million
|
| Proceeds: | $615.656 million (approximate)
|
| Maturity: | June 15, 2016
|
| Coupon: | 10¾%
|
| Price: | 98.505
|
| Yield: | 11%
|
| First call: | Callable on June 15, 2011 at 105.375
|
| Price talk: | 10¾% area
|
|
|
| Floating-rate tranche
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| Amount: | $375 million
|
| Maturity: | June 15, 2014
|
| Coupon: | Six-month Libor plus 600 bps
|
| Price: | Par
|
| Yield: | Six-month Libor plus 600 bps
|
| First call: | Callable on June 15, 2009 at 103.0 (call protection increased to three years from two years)
|
| Price talk: | Libor plus 575 bps
|
|
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