Sunrise to redeem 5½% convertibles, looking at new offering

New York, Jan. 14 - Sunrise Assisted Living, Inc. said it will redeem its outstanding $108 million of 5½% convertible subordinated notes due 2002 and added that its board has approved a new offering of convertible securities.

The McLean, Va. company said the old notes, which mature June 15, 2002, will be redeemed at a price of 101.1 plus accrued interest for a total price of $110 million. Redemption will be on Feb. 12, 2002.

Holders can convert their notes at any time up to the close of business on Feb. 5, 2002 at a price of $37.1875 per share. Sunrise stock closed at $31.05 Friday.

Funding for the redemption will come from a new $92 million secured term loan and cash on hand.

The new loan was provided by Fleet National Bank, Credit Suisse First Boston and First Union

National Bank, Sunrise said. The loan matures in May 2004 with a six-month extension option and has a current interest rate of 8.6%. It is secured by first mortgages on 14 previously unencumbered properties.

At Dec. 31, 2001, Sunrise said it had $50 million of cash on hand.

With the convertibles redeemed, Sunrise has $22 million of debt maturing in the next 12 months, the company said.

Sunrise also said its board has authorized a new convertible subordinated note offering. The Rule 144A sale will be subject to market conditions and Sunrise said neither the new term loan nor its other credit facilities require it to sell the convertibles.

Proceeds would be used to pay down credit facilities, for investments in new properties and for general working capital purposes.

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