Rotech Healthcare $300 million 10-year notes talked at 9½%-9¾%, pricing Friday morning

By Paul A. Harris

St. Louis, Mo., March 13 - Official price talk of 9½%-9¾% was heard Wednesday on Rotech Healthcare, Inc.'s upcoming offering of $300 million senior subordinated notes due 2012 (B2/B+), according to a syndicate source who added that the deal is expected to price Friday morning.

Proceeds from the Rule 144A deal will be used to fund the company's exit financing from Chapter 11, according to a syndicate source.

Joint bookrunners are UBS Warburg and Goldman Sachs & Co.

On February 2, 2000, Integrated Health Services (IHS) and substantially all of its subsidiaries filed under Chapter 11 of the U.S. Bankruptcy Code at the U.S. Court for the District of Delaware.

Rotech's new notes are non-callable for five years and contain an equity clawback of up to 35% for three years.

The company also announced a $275 million senior credit facility due 2008 (Ba2/BB, stable outlooks). The loan will also led by UBS Warburg and Goldman Sachs, according to a syndicate source.

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