United Surgical Partners tenders for 10% notes due 2011

By Jennifer Chiou

New York, July 14 - United Surgical Partners International, Inc. said its subsidiary United Surgical Partners Holdings, Inc. began a tender offer and consent solicitation for any and all of its 10% senior subordinated notes due 2011.

The company is soliciting consents to amend the note indenture to eliminate the restrictive covenants and certain events of default, modify the covenant regarding mergers, shorten the minimum redemption notice period from 30 to five days and modify provisions regarding defeasance to eliminate certain conditions.

The consent deadline is 5 p.m. ET on July 27. The offer ends at midnight ET on Aug. 10.

For each $1,000 principal amount of notes, the company said it will pay the present value of $1,050, the redemption amount of the notes on Dec. 15 - the first call date for the notes - discounted using the yield to maturity on the 2.875% Treasury due Nov. 31, 2006 and 50 basis points. The payout includes a consent payment of $30.00.

United Surgical Partners will also pay accrued interest to the purchase date.

The offer is conditioned upon the receipt of consents from holders of a majority of the notes as well as financing.

The total cost of the tender offer is expected to be about $160 million, assuming all notes are purchased.

The Dallas-based owner and operator of surgical facilities said it will finance the tender with the proceeds of a new $200 million credit facility.

Bear, Stearns & Co. Inc. is the dealer manager solicitation agent (877 696-BEAR). D.F. King & Co., Inc. is the information agent (call collect 212 269-5550 or 800 659-6590).

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