Kindred Healthcare amends loan, changing covenants for 2003, 2004

By Sara Rosenberg

New York, March 19 - Kindred Healthcare Inc. amended its $120 million revolver and $300 million senior secured note agreement, changing financial covenants for 2003 and 2004 related to minimum levels of operating cash flows and certain financial leverage ratios. The levels of minimum net worth were reduced for all remaining periods.

In addition, the amount of allowable acquisitions and investments in healthcare facilities was reduced to $50 million from $130 million.

Amendments obtained in 2002, which allowed the company to repurchase common stock, pay limited dividends and increase annual routine capital expenditures, were rescinded as part of the modified agreements.

These amendments became effective for reporting periods after Dec. 31, 2002.

The amendments were necessary based upon the impact of recent substantial increases in professional liability costs in the company's nursing center business and the effect of certain reductions in Medicare reimbursement to nursing centers that became effective on Oct. 1, 2002, according to a news release.

At Dec. 31, there were approximately $161 million of borrowings under the senior secured notes and the revolver was undrawn.

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

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