Psychiatric Solutions to redeem notes, pay down revolver with stock offering

By Ted A. Knutson

Washington, Nov. 26 - Psychiatric Solutions, Inc. plans to redeem $50 million of its 10 5/8% senior subordinated notes due June 15, 2013 and pay a $5.3 million redemption premium from a newly unveiled 3.45 million share common stock offering.

Remaining proceeds of the estimated $84 million net stock sale will go towards paying down a revolving line of credit from Bank of America NA which matures in January 2007. The company said the revolver has been used to buy inpatient psychiatric centers.

The stock package includes a 450,000-share greenshoe.

Merrill Lynch & Co. and Citigroup are the joint book-running managers with participation from Lehman Brothers, Banc of America Securities LLC, Raymond James and Avondale Partners.

Nashville-based Psychiatric Solutions, a national behavioral health care provider, made the announcement in an S-3 filing with the Securities and Exchange Commission Friday.

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