HealthSouth Amends Credit Agreement and Updates Plan for Initial Call of 10.75% Senior Notes (HLS)

HealthSouth Corporation HLS today announced it has amended its credit agreement and added to it a $100 million term loan. The term loan maturing in 2016 will initially bear interest at a rate of LIBOR plus 2.50 percent. In addition, the current $500 million revolver maturity will be extended to 2016 and the interest rate spread will be reduced by 100 basis points to an initial rate of LIBOR plus 2.50 percent. The Company now intends to call $335 million of the 10.75% senior notes in June 2011, instead of $285 million previously announced. The approximately $353 million of cash required to fund this call will be funded using the proceeds of the $100 million term loan, approximately $77 million of cash on hand resulting from the $120 million senior notes offering in March 2011, and borrowings under the $500 million revolver. As a result of this transaction and the initial call of the 10.75% senior notes, the Company expects interest expense and amortization of debt discounts and fees  to be approximately $70 million in first half of 2011 and approximately $57 million in the second half of 2011.