Thursday, April 07, 2005 6:19:58 PM
Mon Mar 21, 2005 01:22 PM ET
(Adds details on new credit facility, CFO comment, background, share price.)
NEW YORK, March 21 (Reuters) - HealthSouth Corp. (HLSH.PK: Quote, Profile, Research) , which is attempting to overcome an accounting fraud scandal, on Monday said it completed a $715 million debt refinancing that cures all defaults under its existing debt.
HealthSouth, a provider of physical therapy, outpatient surgery and diagnostic imaging, was declared in default of its credit facility in March 2003 after it and several of its executives were accused of inflating the company's earnings.
The company was considered in default of its credit agreement after it said past earnings statements and balance sheets should not be relied on and because the accounting fraud left it unable to file audited financial statements with the Securities and Exchange Commission.
HealthSouth said last week it was still in the process of reconstructing its records.
The new debt facility replaces the $1.25 billion credit facility that JP Morgan Securities and Wachovia Capital Markets froze as a result of the default.
HealthSouth, which is based in Birmingham, Alabama, said the amended and restated credit facility provides for a $315 million term loan, a $250 million revolving line of credit and $150 million in letter of credit facilities.
"This provides us with financial flexibility that the company has not had over the past 18 months and liquidity to satisfy future obligations," HealthSouth Chief Financial Officer John Workman said. "The substantial interest from the investment community allowed us to gain more competitive pricing, reducing our annual fees by almost $1 million."
J.P. Morgan and Wachovia acted as co-lead arrangers and joint bookruners, and Deutsche Bank Securities acted as arranger for the amended and restated credit facility.
Shares of HealthSouth traded at $5.50, up 14 cents, on the over-the-counter Pink Sheets in afternoon trade.
Joe
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