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Centric Health Announces Offer to Purchase All Second Lien Senior Secured Notes

19 January 2016

TORONTO, Jan. 19, 2016 /CNW/ - Centric Health Corporation ("Centric Health" or "the Company") (TSX: CHH) today announced that it intends to offer to purchase, for par value (the "Offer Price"), all of its remaining 8.625% Second Lien Senior Secured Notes (the "Notes") currently outstanding, together with accrued and unpaid interest up to but excluding the date of purchase (the "Offer to Purchase").

Concurrently with the Offer to Purchase, the Company also intends to solicit the consents of the holders of the outstanding Notes to amend its trust indenture (the "Indenture") dated April 18, 2013 among the Company, each of the guarantors party thereto, and Equity Financial Trust Company (the "Consent Solicitation"). The proposed amendments are intended to provide the Company, subject to certain limitations, with additional flexibility to, among other things, repurchase, redeem or otherwise acquire for value or retire its outstanding securities, make interest and principal payments on subordinated debt, incur additional indebtedness, alter the size of its Revolving Credit Facility, make distributions to shareholders, and make additional acquisitions and dispositions (the "Amendments"). The Consent Solicitation shall close immediately prior to the completion of the Offer to Purchase described above. The Amendments require the approval of holders of Notes representing at least 50% of the principal amount of the Notes outstanding. As of the date hereof, the Company has received commitments from holders of over 70% of the outstanding Notes to consent to the proposed Amendments. Centric Health has retained National Bank Financial Inc. to act as the Solicitation Agent for the solicitations of consent.

Registered holders of the Notes wishing to participate must provide a duly completed Letter of Acceptance (a "Notice") indicating their intention to surrender Notes, together with the certificate representing such Notes, to Equity Financial at the address set out in the Notice by 11:00 a.m. (EDT) on February 18, 2016 (the "Notice Deadline"), subject to extension by the Company. Beneficial holders of Notes wishing to participate must contact their broker for specific instructions.

On the day following the Notice Deadline, the Company will publicly announce the total principal amount of the Notes purchased (the "Purchased Notes"). The Company expects to pay the Offer Price for such Notes on February 22, 2016, but in any event no later than February 23, 2016, subject to extensions of the Notice Deadline by the Company. Holders of Notes that are purchased will not receive any future interest payments on such purchased Notes.

All Notes tendered under the Offer to Purchase shall be purchased out of Excess Proceeds. On January 18, 2016, the Company made a determination in accordance with the Indenture that $233,895,799.84 of the net proceeds from the sale of the Company's rehabilitation, physiotherapy and medical assessments divisions completed on December 31, 2015 were Excess Proceeds and, as a result, there are currently Excess Proceeds of $234,204,490.95. In the event that not all of the holders of the Notes accept the offer and, as a result, the Company remains subject to its obligations under the Indenture following completion of the Offer to Purchase, the Company intends to apply the balance of the Excess Proceeds remaining after the completion of such offering for any purpose not otherwise prohibited by the Indenture, which may include the repurchase, redemption, defeasance or other acquisition or retirement for value of indebtedness of the Company and guarantors under the Indenture that is subordinated in right of payment to the Notes, or for the redemption of issued and outstanding preferred units of LifeMark Health Limited Partnership held by Alaris.

Centric Health will discontinue engaging the debt rating services provided by Standard & Poors and Dominion Bond Rating Services for such Notes, effective as of the payment date.

Please click here for the complete press release.