HealthSouth Corporation Prices Convertible Perpetual Preferred Stock
Tuesday February 28, 6:52 pm ET
BIRMINGHAM, Ala., Feb. 28 /PRNewswire-FirstCall/ -- HealthSouth Corporation (OTC Pink Sheets: HLSH - News) priced $400 million of convertible perpetual preferred stock through a private placement to qualified institutional buyers.
Shares of the preferred stock will be convertible into the Company's common stock at an initial conversion price of $6.10 per share. Holders of preferred stock will generally be entitled to receive dividends at the rate of 6.5% per year, payable quarterly. The Company expects this transaction to close on or about March 7, 2006.
The purpose of the preferred stock issuance is to reduce HealthSouth's outstanding indebtedness. If HealthSouth successfully completes its previously announced recapitalization transactions, the amount of senior unsecured interim term loans HealthSouth will be permitted to borrow in connection with the recapitalization transactions will be reduced by the amount of gross proceeds that HealthSouth receives from the preferred stock issuance. If the recapitalization transactions are not completed, HealthSouth will use the net proceeds that it receives from the preferred stock issuance to repay a portion of its outstanding senior unsecured indebtedness.
The convertible perpetual preferred stock and the underlying common stock issuable upon conversion have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. This news release does not constitute an offer to sell, or solicitation of an offer to buy, any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering would be unlawful.
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