Published on 5/12/2020 in the Prospect News High Yield Daily.
New Issue: Encompass Health prices upsized $600 million of notes in two add-ons
By Paul A. Harris
Portland, Ore., May 12 – Encompass Health Corp. priced an upsized $600 million of senior notes (B1/B+) by means of tapping two existing issues in a Tuesday drive-by, according to a syndicate source.
The deal included an upsized $300 million (from $250 million) add-on to its 4½% senior notes due Feb. 1, 2028, which priced at 99 to yield 4.655%. The issue price came at the rich end of the 98.5 to 99 price talk.
Encompass Health also priced an upsized $300 million ($250 million) add-on to its 4¾% senior notes due Feb. 1, 2030 at 98.5 to yield 4.945%. The price came at the rich end of the 98 to 98.5 price talk.
The overall amount of issuance increased from $500 million.
The Birmingham, Ala.-based health care services provider plans to use the proceeds, together with cash on hand, to repay $350 million under its revolving credit facility, with any remaining proceeds to be used for working capital and other general corporate purposes.
| Issuer: | Encompass Health Corp.
|
| Amount: | $600 million, increased from $500 million
|
| Securities | Senior notes add-ons
|
| Bookrunners: | BofA Securities Inc., Barclays, Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, RBC Capital Markets LLC, Regions Securities LLC, SunTrust Robinson Humphrey Inc. and Wells Fargo Securities LLC
|
| Trade date: | May 12
|
| Settlement date: | May 15
|
| Ratings: | Moody's: B1
|
| S&P: B+
|
| Distribution: | SEC registered
|
| Marketing: | Drive-by
|
|
|
| Add-on to 2028 notes
|
| Amount: | $300 million, increased from $250 million
|
| Maturity | Feb. 1, 2028
|
| Coupon: | 4½%
|
| Price: | 99
|
| Yield: | 4.655%
|
| First call: | Feb. 1, 2023 at 102.25
|
| Price talk: | 98.5 to 99
|
|
|
| Add-on to 2030 notes
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| Amount: | $300 million, increased from $250 million
|
| Maturity: | Feb. 1, 2030
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| Coupon: | 4¾%
|
| Price: | 98.5
|
| Yield: | 4.945%
|
| First call: | Feb. 1, 2025 at 102.375
|
| Price talk: | 98 to 98.5
|
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