set a recapitalization plan.
The Birmingham, Ala., clinic chain said its plan calls for $2.55 billion of senior secured credit facilities and a $1.3 billion senior unsecured interim loan. The company anticipates refinancing the $1.3 billion senior unsecured interim loan in the first or second quarter of 2006 through an issuance of predominantly debt securities, as well as equity securities.
"This is another major milestone in HealthSouth's efforts to put our past behind us," said CEO Jay Grinney. "The proposed capital structure will provide us with the flexibility necessary to manage our debt while implementing our plans for future growth."
HealthSouth Chief Financial Officer John Workman added, "We believe the proposed new capital structure is a significant first step toward addressing our balance sheet issue. It allows us to better execute on key operational initiatives, address the changing regulatory environment, take advantage of the strong capital market conditions, and maximize pre-payable debt to allow for future de-leveraging."
In connection with the recapitalization, HealthSouth will announce a cash tender offer to purchase all $2.03 billion of outstanding senior notes and $319 million senior subordinated notes. The company also announced it is requesting amendments to its $200 million senior unsecured term loan and $355 million senior subordinated term loan credit agreements to, among other things, allow for the prepayment of each of these term loans, which the company also intends to prepay along with its other indebtedness.