Centric Health Completes Purchase and Cancellation of $164 Million of Second Lien Senior Secured Notes
TORONTO, Feb. 23, 2016 /CNW/ - Centric Health Corporation ("Centric Health" or "the Company") (TSX: CHH) today announced that, further to its news release of February 19, 2016, the Company has issued payment of $169,071,963.57 in respect of its 8.625% Second Lien Senior Secured Notes (the "Notes") that were surrendered under the Company's offer to purchase all of the Notes outstanding as of January 19, 2016 (the "Offer"). The total payment was composed of a principal amount of $164,264,000.00 plus $4,807,963.57 in accrued and unpaid interest up to but excluding the date of purchase. The repurchase of the Notes will result in interest expense savings to the Company of $14.2 million annually.
"The retirement of $164 million of Note-related debt represents another significant milestone in our debt reduction strategy," said David Cutler, President and Chief Executive Officer, Centric Health. "With certainty around the magnitude of the Note purchase, we are now in a position to make final decisions regarding the next steps in our debt reduction plan and look forward to providing such details in the near term."
The purchase of Notes was financed by Excess Proceeds. As previously announced, the Company had Excess Proceeds (primarily from the net proceeds from the sale of the Company's rehabilitation, physiotherapy and medical assessments divisions completed on December 31, 2015) of $234,204,491. Immediately following payment for the Notes, the Company has $65,279,529 in Excess Proceeds remaining. The Company intends to use these remaining Excess Proceeds, subject to any required consents or approvals, for any purpose not otherwise prohibited by the trust indenture dated April 18, 2013, as amended pursuant to the Company's previously announced, and recently completed, consent solicitation, among the Company, each of the guarantors party thereto, and Equity Financial Trust Company (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 and is actively considering alternatives in that regard.
Following completion of the Offer, the total principal amount of the Notes outstanding is $25,894,000. The remaining Notes outstanding continue to have a maturity date of April 18, 2018 and, beginning April 18, 2017, the Company can, at its discretion, redeem at par all or any part of the Notes.
The Company also announced that the amendments to the Indenture for the Notes, which were previously approved by a majority of holders of the then outstanding Notes pursuant to the Company's consent solicitation, have become effective as of February 22, 2016.
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