New Issue: Extendicare $125 million 10-year notes yield 7.229%

By Paul A. Harris

St. Louis, April 15 - Extendicare Health Services Inc. sold $125 million of 10-year senior subordinated notes (B2/B-) Thursday at 97.50 with a 6 7/8% coupon to yield 7.229%, a syndicate source said.

Price talk was 7% to 7¼%.

Lehman Brothers ran the books on the Rule 144A/Regulation S issue. Piper Jaffray and ABN Amro were co-managers.

Proceeds will be used to partially fund the tender for $200 million of the company's outstanding 9.35% senior subordinated notes due 2007.

The issuer is a wholly owned subsidiary of Milwaukee-based Extendicare Inc., operator of long-term care and home health care services.

Issuer:	Extendicare Health Services Inc.
Amount:	$125 million
Maturity:	May 1, 2014
Security description:	Senior subordinated notes
Bookrunner:	Lehman Brothers
Co-managers:	Piper Jaffray, ABN Amro
Coupon:	6 7/8%
Price:	97.50
Yield:	7.229%
Spread:	285 basis points
Call features:	Callable after May 1, 2009 at 103.438, 102.292, 101.146, par on or after May 1, 2012
Equity clawback:	Until May 1, 2007 for 35% at 106.875
Pricing date:	April 15
Settlement date:	April 22
Ratings:	Moody's: B2
	Standard & Poor's: B-
Price talk:	7%-7¼%

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