HealthSouth extends tender for senior, senior subordinated notes

New York, March 1 - HealthSouth Corp. said it has extended the expiration of its tender offer for its $180.3 million of 7 3/8% senior notes due 2006, $343 million of 8½% senior notes due 2008, $250 million of 7% senior notes due 2008, $319.26 million of 10¾% senior subordinated notes due 2008, $347.7 million of 8 3/8% senior notes due 2011 and $908.7 million of 7 5/8% senior notes due 2012.

The deadline is now 5 p.m. ET on March 6 instead of midnight ET on March 2.

As of 5 p.m. ET on March 1, holders had tendered 90.78% of the 7 3/8% senior notes due 2006, 97.15% of the 8½% senior notes due 2008, 97.94% of the 7% senior notes due 2008, 90.38% of the 10¾% senior subordinated notes due 2008, 99.77% of the 8 3/8% senior notes due 2011 and 99.83% of the 7 5/8% senior notes due 2012.

At its previous announcement on Feb. 15, HealthSouth said it received the necessary consents to amend the notes. The company added that it has executed supplemental indentures which will go into effect when it buys the notes.

On Feb. 10, HealthSouth announced it modified the payout for two of the six series of notes covered by the cash tender.

For each $1,000 principal amount, the company said it will pay $1,084.81 instead of $1,082.50 for the 8 3/8% notes and $1,058.43 compared to $1,062.50 for the 7 5/8% notes.

The company previously announced it will pay $1,012.50 for the 7 3/8% notes, $1,058.75 for the 8½% notes, $1,037.50 for the 7% notes and $1,037.50 for the 10¾% notes.

HealthSouth is soliciting consents to proposed amendments for the notes' indentures to eliminate substantially all of the restrictive covenants and amend certain events of default.

The payouts include a $50.00 consent payment for those who tendered their holdings before 5 p.m. ET on Feb. 15.

The offers are conditioned upon, among other requirements, financing and tenders from holders of a majority of the notes.

Global Bondholder Services Corp. is the depositary and information agent (call collect 212 430-3774 or 866 804-2200). Questions may be directed to Merrill Lynch & Co. (888 ML4-TNDR or call collect 212 449-4914), Citigroup Corporate and Investment Banking (800 558-3745 or call collect 212 723-6106) or J.P. Morgan Securities Inc. (866 834-8666 or call collect 212 834-4388).

The company started the offer on Feb. 2.

Based in Birmingham, Ala., HealthSouth provides outpatient surgery, diagnostic imaging and rehabilitative health care services.

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