Exhibit (a)(2)
CII FINANCIAL, INC.
California Indemnity Insurance Company
Commercial Casualty Insurance Company
subsidiaries of Sierra Health Services, Inc.
P.O.Box 15645, Las Vegas, Nevada 89114-5645
tel. 702 242 7046 fax 702 242 4819
PRESS RELEASE
FOR IMMEDIATE RELEASE
CONTACTS: John Okita Andrew C. Karp
Chief Financial Officer Managing Director
(702) 242-7531 Banc of America Securities
High Yield Special Products
(704) 388-4813 or (888) 292-0070
CII FINANCIAL ANNOUNCES EXCHANGE OFFER FOR
CONVERTIBLE SUBORDINATED DEBENTURES
Las Vegas, December 26, 2000 - CII Financial, Inc. today announced the
commencement of an exchange offer for all $47 million of its outstanding 7-1/2%
convertible subordinated debentures due September 15, 2001 (CUSIP No.
12551LAB7). Under the offer, holders can choose to exchange their old 7-1/2%
junior subordinated debentures for either new debentures or cash.
Holders who choose new debentures will receive $1,000 principal amount
of new 9% senior subordinated debentures due September 15, 2006 of CII Financial
for each $1,000 principal amount of their old 7 1/2% junior subordinated
debentures, plus accrued and unpaid interest in cash. Holders who choose cash
will receive $525 in cash for each $1,000 principal amount of their old junior
subordinated debentures, plus accrued and unpaid interest in cash.
CII Financial will purchase no more than $19.5 million principal amount
of old junior subordinated debentures for cash. If the cash option is
oversubscribed, the company will purchase a total of $19.5 million principal
amount of debentures for cash and will exchange the balance of the tendered
debentures for new 9% senior subordinated debentures due 2006. All holders who
elect the cash option will be treated on a pro rata basis according to the
principal amount of debentures tendered for cash by each holder and the total
principal amount of debentures tendered for cash by all holders.
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CII Announces Exchange Offer p.2/2/2/2/2
The exchange offer will expire at 5:00pm, New York City time, on
January 25, 2001, unless extended. Holders must tender their old junior
subordinated debentures on or prior to the expiration date in order to receive
the exchange consideration. The exchange offer is subject to the satisfaction of
specified conditions, including the valid tender of at least 90% of the
outstanding junior subordinated debentures, receipt of financing for the cash
option, receipt of necessary approvals from insurance authorities, receipt of
necessary consents from lenders under the Sierra Health Services senior credit
facility, which is guaranteed by CII Financial, and other customary conditions.
The complete terms of the offer are contained in the preliminary Prospectus and
Exchange Offer dated December 26, 2000.
A registration statement relating to the new debentures has been filed
with the Securities and Exchange Commission but has not yet become effective.
The new debentures may not be sold nor may tenders be accepted prior to the time
the registration statement becomes effective. This shall not constitute an offer
to sell or the solicitation of an offer to buy nor shall there be any sale of
the new debentures in any State in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws of
any such State.
Banc of America Securities, LLC is the exclusive dealer manager for the
offer. D.F. King & Co., Inc. is the information
agent and Wells Fargo Corporate Trust is the depositary. Copies of the
preliminary Prospectus and Exchange Offer may be obtained by
calling D.F. King at (800) 735-3591. Additional information concerning the
terms and conditions of the offer may be obtained by
contacting Banc of America Securities at (888) 292-0070.
CII Financial is a holding company primarily engaged in writing
workers' compensation insurance in nine western and mid-western states through
its wholly owned subsidiaries, California Indemnity Insurance Company,
Commercial Casualty Insurance Company, Sierra Insurance Company of Texas and CII
Insurance Company. CII Financial is a wholly owned subsidiary of Sierra Health
Services, Inc. (NYSE:SIE), a diversified health care services company based in
Las Vegas.
Statements in this news release that are not historical facts are
forward-looking and based on management's projections, assumptions and
estimates; actual results may vary materially. Forward-looking statements are
subject to certain risks and uncertainties, which may be found in the
preliminary Prospectus and Exchange Offer and other documents filed with the
Securities and Exchange Commission and which are incorporated herein by
reference.
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