Extendicare gets required consents, sets pricing for 9½%, 6 7/8% notes tender offer

By Angela McDaniels

Seattle, Oct. 6 - Extendicare Inc. said its subsidiary, Extendicare Health Services, Inc., received consents from holders of 100% of its $150 million 9½% senior notes due 2010 and from holders of 99.98% of its $125 million 6 7/8% senior subordinated notes due 2014 during a consent solicitation that ended Thursday.

Extendicare Health Services will therefore amend the indentures governing the notes to eliminate substantially all of the restrictive covenants and certain event of default provisions.

The company also priced the tender consideration in connection with its tender offer for the notes, which ends at midnight E.T. on Oct. 20.

Noteholders will receive $1,050 for each $1,000 principal amount of 9½% notes tendered and $1,072.42 for each $1,000 principal amount of 6 7/8% notes tendered.

The consideration for the 6 7/8% notes was determined by pricing the notes to the first call date at 50 basis points over the bid-side yield on the 4.875% U.S. Treasury note due May 15, 2009 at 2 p.m. ET on Oct. 5.

The payouts include a $30 consent fee for noteholders who submitted tenders before the consent deadline. Noteholders who tender notes must also consent to the amendments.

The company will also pay accrued interest up to but excluding the settlement date for both series of notes.

Settlement of the tender is contingent on funding from the company's collateralized mortgage-backed securitization and on an amended or new revolving credit facility.

Lehman Brothers Inc. (800 438-3242 or collect 212 528-7581) is dealer manager and solicitation agent. D.F. King & Co., Inc. (888 567-1626 or collect 212 269-5550) is information agent and tender agent.

Extendicare Health Services is a Milwaukee-based long-term health care provider.

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