Kindred Healthcare amends loan, allowing for nursing center divestiture plans

By Sara Rosenberg

New York, June 16 - Kindred Healthcare Inc. amended its revolver and senior secured notes agreement in order to allow for its previously announced divestiture of Florida and Texas nursing centers.

In addition, the amendment modified certain financial covenants and increased commitment fees under the revolver to 75 basis points from 50 basis points. Interest rates on borrowed amounts, repayment terms and maturities were unchanged.

Basically, the amendment allows for the company to purchase 15 Florida nursing centers and one Texas nursing center currently leased from Ventas Inc. Lender approval was also granted for the company to proceed with the previously announced divestiture plans that includes 18 Florida nursing centers (including the 15 facilities to be acquired from Ventas) and two Texas nursing centers (including the one facility to be acquired from Ventas).

The purchase of the leased nursing centers will not impact the company's existing allowances for acquisitions and investments in healthcare facilities.

Furthermore, under the amendment, the company must make a $60 million repayment of the senior secured notes from the sales proceeds of these nursing centers. If the sales of the Florida and Texas nursing centers are not completed by Dec. 31, 2003, the company has agreed to repay the $60 million from its existing cash balances, according to a news release.

At March 31, there was $160.5 million outstanding under the senior secured notes agreement and there were no borrowings outstanding under the revolver.

Kindred Healthcare is a Louisville, Ky. provider of long-term healthcare services primarily operating nursing centers and hospitals.

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