Encompass Health offers $800 million of senior notes in two parts; pricing expected Monday

By Cristal Cody

Tupelo, Miss., Sept. 9 – Encompass Health Corp. (Ba3/BB-) intends to price an $800 million two-tranche registered offering of fixed-rate senior notes (expected ratings B1/B+) on Monday, according to a market source and a 424B5 filing with the Securities and Exchange Commission.

The deal includes senior notes due Feb. 1, 2028 and senior notes due Feb. 1, 2030.

Bookrunners are Citigroup Global Markets Inc., Barclays, 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.

The 2028 notes will have a make-whole call before 2023 and a par call thereafter. The 2030 notes have a make-whole call before 2025 and are callable thereafter at par.

Before 2023, the company may redeem up to 35% of the 2028 notes from proceeds of certain equity offerings, while the company may redeem up to 35% of the 2030 notes before 2025.

The notes have a change-of-control put of 101%.

The issues are guaranteed by Encompass Health subsidiaries that guarantee borrowings under the company's credit agreement and other capital markets debt.

Encompass Health plans to use the proceeds to pay about $218 million to fund the purchase of equity from management investors of its home health and hospice segment, to fund a call of $200 million of its 5.75% senior notes due 2024 and to repay borrowings under the company’s revolving credit facility. Remaining proceeds will be used for working capital and other general corporate purposes.

Encompass Health is a Birmingham, Ala.-based health care services company.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.