Kindred Healthcare rejiggers $1.35 billion two-part notes offering

By Paul A. Harris

Portland, Ore., Dec. 10 – Kindred Healthcare Inc. undertook changes to the $1.35 billion two-part offering of senior notes (/B-/) backing its merger with Gentiva Health Services, Inc., a syndicate source said on Wednesday.

The company withdrew a proposed tranche of 10-year notes.

Left in place is a tranche of eight-year notes, which come with three years of call protection. The initial call premium is increased to par plus 75% of the coupon from 50% of the coupon.

In addition, the financing will now include a tranche of non-callable five-year notes.

Tranche sizes remain to be determined.

Price talk was expected on Wednesday afternoon; however, it was not available at press time, according to market sources.

The Rule 144A and Regulation S with registration rights deal is set to price Thursday morning.

Citigroup Global Markets Inc. is the left bookrunner. J.P. Morgan Securities LLC, Guggenheim Securities and Morgan Stanley & Co. LLC are the joint bookrunners.

BMO Capital Markets, Deutsche Bank Securities Inc. and SunTrust Robinson Humphrey Inc. are the co-managers.

The issuing entity is Kindred Healthcare Escrow Corp. II.

Proceeds will be used to fund the cash consideration for the merger of Kindred with Gentiva and to repay Gentiva’s existing debt.

Kindred is a Louisville, Ky.-based health care services company.

Gentiva is an Atlanta-based provider of home health and hospice services.

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