Emeritus starts exchange for 6.25% convertibles due 2006

By Jennifer Chiou

New York, Oct. 18 - Emeritus Assisted Living announced the launch of its exchange offer for $32 million of its 6.25% convertible subordinated debentures due Jan. 1, 2006.

The Seattle-based assisted living provider said it plans to offer $32 million of new 6.25% debentures due December 2008. The new notes are non-callable and interest is payable semiannually.

Other terms of the new debentures are identical to company's existing ones, including the right to convert into Emeritus stock at $22.00 per share.

The offer expires at 5 p.m. ET on Nov. 16, unless extended.

Emeritus announced plans for the exchange on July 6 and previously the company said it intended to issue new non-callable debentures due June 30, 2008 with an 8% coupon.

Entities controlled by Emeritus' chief executive officer Daniel R. Baty and Saratoga Partners together own about 65% of the existing convertibles and have agreed to the exchange. They have also agreed to buy new debentures up to the amount of any existing ones that are not tendered, with the result that the existing issue will be entirely replaced.

U.S. Bank, NA is trustee.

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