Exhibit (a)(18)
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
PRESS RELEASE
FOR IMMEDIATE RELEASE
CONTACTS: John Okita Andrew C. Karp
Chief Financial Officer Managing Director
(702) 242-7531 Banc of America Securities LLC
High Yield Special Products
(704) 388-4813 or (888) 292-0070
CII FINANCIAL ANNOUNCES REVISED TERMS OF EXCHANGE OFFER FOR CONVERTIBLE
SUBORDINATED DEBENTURES AND EXTENSION OF EXPIRATION DATE
Las Vegas, April 2, 2001 - CII Financial, Inc. today announced the
amendment of its pending 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 senior debentures
or cash.
The Company said the revised terms of the offer consist of the
following:
- - The cash purchase price has been increased from $525 per $1,000 principal
amount to $700 per $1,000 principal amount, plus accrued interest.
- - The funds available to finance the offer have been increased from
$10,237,500 to $20,000,400. As a result, the Company is now
offering to buy a total of $28,572,000 principal amount of old 7
1/2% subordinated debentures, or 60.7%, for cash.
- - The Company is offering to exchange the remaining $18,487,000 principal
amount of old 7 1/2% subordinated debentures for new senior debentures.
---more---
CII Announces Revised Terms p. 2/2/2/2/2
- - The interest rate on the new senior debentures has been increased
from 9% to 9 1/2%. In addition, the maturity of the new senior
debentures has been shortened from September 15, 2006 to March 31,
2005.
- - The new 9 1/2% senior debentures will be senior indebtedness of
CII Financial and will rank senior to all other indebtedness,
including any remaining old 7 1/2% subordinated debentures. The
new 9 1/2% senior debentures will also rank senior to CII
Financial's guaranty of the $135 million credit facility of the
Company's parent, Sierra Health Services, Inc., subject to
majority approval by the bank group.
- - In the event of a change of control of CII Financial, holders of
the new 9 1/2% senior debentures will have the right to require
the Company to repurchase their new debentures at 100% of the
principal amount, plus a specified premium declining over time.
The repurchase premium will initially be 5%.
Under the amended offer, holders who elect cash will receive $700 in
cash for each $1,000 principal amount of their old 7 1/2% subordinated
debentures accepted under the cash option, plus accrued and unpaid interest in
cash. If holders of more than $28.6 million total principal amount of old 7 1/2%
subordinated debentures elect to sell their debentures for cash, the Company
will purchase a total of $28.6 million principal amount of old 7 1/2%
subordinated debentures for cash and the Company will exchange the balance of
the tendered debentures for new 9 1/2% senior debentures. All holders who elect
to receive cash will be treated equally in this process. It is a condition of
the offer, as amended, that at least $28.6 million total principal amount of old
7 1/2% subordinated debentures be tendered for cash.
As a result of the revisions, holders who elect new 9 1/2% senior
debentures will receive $1,000 principal amount of new 9 1/2% senior debentures
for each $1,000 principal amount of their old 7 1/2% subordinated debentures,
plus accrued and unpaid interest in cash. It is a condition of the offer, as
amended, that the Company will exchange no more than $18.5 million total
principal amount of old 7 1/2% subordinated debentures for new 9 1/2% senior
debentures.
The expiration date for the exchange offer has been extended from 5:00
p.m., New York City time, on April 2, 2001, to 11:59 p.m., New York City time,
on April 12, 2001. The Company filed an amended Registration Statement with the
Securities and Exchange Commission on March 30, 2001.
The Company said that, prior to revising the terms of the offer, it had
received tenders from holders of $14,776,000 in aggregate principal amount of
debentures as of 5:00 p.m., New York City time, on March 30, 2001.
---more---
CII Announces Revised Terms p. 3/3/3/3/3
The complete terms of the offer, as amended, are contained in the
amended Preliminary Prospectus and Exchange Offer dated March 30, 2001.
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 LLC 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, some of 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.
Additional Information and Where to Find It:
CII Financial, Inc. has filed a Registration Statement with the
Securities and Exchange Commission on Form S-4 registering the new debentures to
be issued in the exchange offer. The Registration Statement and the preliminary
prospectus contained therein contain important information about CII Financial,
the exchange offer and related matters. Security holders are urged to read the
Registration Statement and the preliminary prospectus contained therein, CII
Financial's Schedule TO and any other relevant documents filed by CII Financial
with the SEC.
The Registration Statement has not yet become effective. The new
debentures may not be sold and, although you may tender your old debentures,
tenders may not be accepted prior to the time the Registration Statement becomes
effective. This shall not constitute an offer to sell or 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.
Security holders are able to obtain copies of the Registration
Statement on Form S-4 and the preliminary prospectus, CII Financial's Schedule
TO and any other relevant documents for free through the Web site maintained by
the SEC at http://www.sec.gov. In addition, these documents are available free
of charge by contacting the Information Agent for the offer, D.F. King & Co., at
(800) 735-3591. If you have any questions about the offer, please call the
Dealer Manager for the offer, Banc of America Securities LLC, at (888) 292-0070.
# # #