Trading levels were thin on the break of HealthSouth Corp.'s $2.05 billion term loan. The loan broke at 100 5/8 and dipped to 100 1/4. A trader said deal flows were probably low because the credit was well allocated and people got what they wanted. JPMorgan, Citigroup and Merrill Lynch lead the deal, which also consists of a $500 million revolver and a $1.3 billion bridge loan.
HealthSouth will use the financing to pay down almost $3 billion in loans and bonds (CIN, 2/06). The company anticipates refinancing the $1.3 billion bridge loan in the first or second quarter of 2006 through an issuance of debt securities and equity. As part of the recapitalization, HealthSouth is launching a cash tender offer to buy $2.03 billion of outstanding senior notes and $319 million of senior subordinated notes. It is requesting amendments to its $200 million senior unsecured term loan and $355 million senior subordinated term loan to allow for the prepayment of these loans. Officials at HealthSouth did not return calls by press time.