United Surgical Partners completes tender offer with purchase of 99.5% of outstanding 10% notes

By Laura Lutz

Des Moines, Aug. 11 - United Surgical Partners International, Inc. completed the tender offer and consent solicitation for the outstanding 10% senior subordinated notes due 2011 of its subsidiary, United Surgical Partners Holdings, Inc.

The company accepted tenders for $149.92 million, or 99.947%, of the outstanding notes.

The offer expired at midnight ET on Aug. 10.

As previously reported, the company had received tenders for $148.8 million of those by the July 27 consent deadline. With those consents, it amended the note indenture to eliminate the restrictive covenants and some events of default, modify the covenant regarding mergers, shorten the minimum redemption notice period to five days from 30 and modify provisions regarding defeasance to eliminate some conditions.

For each $1,000 principal amount, the company will pay $1,063.67, including the $30.00 consent payment. Accrued interest will add a further $14.72.

Pricing was set using the present value of $1,050, the redemption amount of the notes on Dec. 15 - the first call date for the notes - discounted using the yield to maturity on the 2.875% Treasury due Nov. 31, 2006 and 50 basis points. The payout includes a consent payment of $30.00.

United Surgical Partners also paid accrued interest to the purchase date.

As of 5 p.m. ET on Aug. 7, United Surgical had received tenders for $149.9 million or 99.3% of the notes, up from the $148.8 million or 99.2% previously announced as having been received by the consent deadline of July 27.

United Surgical will finance the tender with the proceeds of a new $200 million credit facility. The offer is contingent upon its completion of the credit facility.

The tender started on July 14.

Bear, Stearns & Co. Inc. is the dealer manager solicitation agent (877 696-BEAR). D.F. King & Co., Inc. is the information agent (call collect 212 269-5550 or 800 659-6590).

United Surgical is a Dallas-based owner and operator of surgical facilities.

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