United Surgical buys all 8 7/8%, toggle notes tendered by consent date

By Angela McDaniels

Tacoma, Wash., April 3 - United Surgical Partners International, Inc. purchased all of the notes it received by the consent deadline and will redeem any notes that remain outstanding after the completion of the tender offer, according to a company news release.

The company began a tender offer for its outstanding $437.5 million principal amount of 8 7/8% senior subordinated notes due 2017 and 9¼%/10% senior subordinated toggle notes due 2017 on March 14. The offer will end at midnight ET on April 10.

All of the notes tendered by the consent deadline, 5 p.m. ET on March 27, were purchased on April 3. For each $1,000 principal amount, the purchase price was $1,048.13 for the 8 7/8% notes and $1,050.00 for the toggle notes. These payments included a $30.00 consent premium.

Following the early settlement, $44.8 million of the 8 7/8% notes and $32,806,000 of the toggle notes remain outstanding.

The purchase price will be $1,018.13 for 8 7/8% notes and $1,020.00 for toggle notes tendered after the consent date.

Notes that remain outstanding following the tender offer will be redeemed on May 1. The redemption price is 104.438% of par for the 8 7/8% notes and 104.625% of par for the toggle notes.

In all cases, the company will also pay accrued interest up to but excluding the applicable payment date.

The company also is soliciting consents to amend the notes to eliminate substantially all of the restrictive covenants and event of default provisions and to reduce the minimum redemption notice to three days from 30 days, according to a company press release.

Holders who tender their notes are deemed to have consented to the amendments. Holders cannot consent to the proposed amendments without tendering their notes.

The tender offer and the consent solicitation are conditioned upon the completion of financing and the amendment of the notes after receiving the needed consents from the holders of a majority of the outstanding principal amount of notes.

The company is using the proceeds of USPI Finance Corp.'s $440 million of 9% senior notes due 2020, borrowings under an amendment to United Surgical Partners' senior secured credit facility and cash on hand to refinance debt and pay a dividend to its ultimate parent's equity holders.

Barclays Capital Inc. (800 438-3242 or 212 528-7581) and J.P. Morgan Securities LLC (800 245-8812 or 212 270-1200) are the dealer managers and solicitation agents. D.F. King & Co., Inc. (806 714-3312 or banks and brokers 212 269-5550) is the information agent and tender agent.

United Surgical Partners is a Dallas-based owner and operator of ambulatory surgery centers and surgical hospitals.

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