HealthSouth obtains waiver of payment blockage, will pay interest on debt

By Carlise Newman

Chicago, Aug. 28 - HealthSouth Corp. said its lending banks have waived a payment blockage to allow past due interest to be paid to the holders of the company's subordinated debt. The banks had previously issued a payment blockage notice regarding the company's subordinated debt, which would have precluded holders of those instruments from receiving past-due interest.

The company also said it will transfer sufficient funds to the trustees so that holders of all its outstanding notes will receive past-due interest.

Payment is expected to be made shortly after the record date of Aug. 29.

As previously announced, on Aug. 12, HealthSouth paid $117 million to its lending banks and the trustees under its indentures, representing payment of all past-due interest owed under its various borrowing agreements.

Birmingham, Ala.-based HealthSouth is a provider of outpatient surgery.

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