Encompass Health driving by with $400 million 10.5-year senior notes; initial talk in 4 7/8% area

By Paul A. Harris

Portland, Ore., Sept. 30 – Encompass Health Corp. plans to price a $400 million public offering of senior notes due April 1, 2031 (expected ratings B1/B+) in a Wednesday drive-by trailing a late-morning conference call with investors, according to market sources.

Initial talk has the notes coming to yield in the 4 7/8% area, a trader said.

Truist Securities Inc. is the left bookrunner. Barclays, BofA Securities Inc., Citigroup Global Markets Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Morgan Stanley & Co. LLC, RBC Capital Markets Corp., Regions Securities LLC and Wells Fargo Securities LLC are the joint bookrunners.

The notes become callable after 5.5 years at par plus 50% of the coupon. They also feature a 35% equity clawback at par plus the coupon.

The Birmingham, Ala.-based provider of inpatient rehabilitative health care services plan to use the proceeds to redeem its 5¾% senior notes due 2024.

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