Exhibit 99.1
[HEALTHSOUTH GRAPHIC OMITTED]
Media Contact March 10, 2006
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Andy Brimmer, 205-410-2777
HEALTHSOUTH CORPORATION ANNOUNCES COMPLETION OF RECAPITALIZATION
TRANSACTIONS AND PREPAYMENT OF EXISTING INDEBTEDNESS
BIRMINGHAM, Ala., March 10 -- HealthSouth Corporation (OTC Pink Sheets: HLSH)
announced today that it completed its previously announced plan to prepay
substantially all of its existing indebtedness with proceeds from a series of
recapitalization transactions. HealthSouth has entered into a credit agreement
that provides up to $2.55 billion of senior secured financing with a
consortium of financial institutions and an interim loan agreement that
provides $1 billion of senior unsecured interim loans. HealthSouth used a
portion of the proceeds of the loans under the senior credit facility, the
proceeds of the interim loans and the proceeds of $400 million from its
previously announced issuance and sale of 400,000 shares of 6.50% Series A
Preferred Stock, completed on March 7, 2006, along with cash on hand, to
prepay substantially all of its existing indebtedness and to pay fees and
expenses related to such prepayment and the recapitalization transactions. The
remainder of the proceeds and availability under the senior credit facilities
are expected to be used for general corporate purposes. HealthSouth
anticipates refinancing the $1 billion interim loans in the second quarter or
third quarter of 2006 through an issuance of debt securities.
"This is another major step in HealthSouth's efforts to put our past behind
us," said HealthSouth President and CEO Jay Grinney. "We are very encouraged
by the strong support we have received through this process and believe this
capital structure provides us with the flexibility necessary to manage our
debt while implementing our plans for future growth."
HealthSouth Chief Financial Officer John Workman added, "The new capital
structure is a significant step in strengthening our balance sheet. It allows
us to better execute on key operational initiatives, address the changing
regulatory environment, take advantage of the strong capital market
conditions, and maximize pre-payable debt to allow for future de-leveraging."
As part of the recapitalization transactions, HealthSouth also announced today
that it successfully completed its previously announced cash tender offers and
related consent solicitations for $2.03 billion of outstanding senior notes
and $319 million of outstanding senior subordinated notes. The tender offers
expired at 5:00 p.m., New York City time, on March 9, 2006 (the "Expiration
Time"). As of the Expiration Time, $1,996,842,000 in aggregate principal
amount of senior notes, representing 98.4 % of the senior notes, and
$288,964,000 in aggregate principal amount of senior subordinated notes,
representing 90.5 % of the senior subordinated notes, were validly tendered
for purchase and not withdrawn, and HealthSouth has accepted such notes for
purchase. The aggregate purchase price, including accrued and unpaid interest
and the consent payment, was approximately $2,530,331,119.
J.P. Morgan Securities Inc., Citigroup Global Markets Inc., and Merrill Lynch
& Co. were the co-lead arrangers and joint bookrunners for the $2.55 billion
senior secured credit facilities and Merrill Lynch & Co., Citigroup Global
Markets Inc. and J.P. Morgan Securities Inc. were the co-lead arrangers and
joint bookrunners for the $1 billion interim loans. Deutsche Bank Securities
Inc., Goldman, Sachs & Co., and Wachovia Capital Markets, LLC were the
co-managers for the senior secured credit facilities and the interim loans.
About HealthSouth
HealthSouth is one of the nation's largest providers of outpatient surgery,
diagnostic imaging and rehabilitative healthcare services, operating facilities
nationwide. HealthSouth can be found on the Web at www.healthsouth.com.
Statements contained in this press release which are not historical facts are
forward-looking statements. In addition, HealthSouth, through its senior
management, may from time to time make forward-looking public statements
concerning the matters described herein. Such forward-looking statements are
necessarily estimates based upon current information, involve a number of
risks and uncertainties. HealthSouth's actual results may differ materially
from the results anticipated in these forward-looking statements as a result
of a variety of factors. While it is impossible to identify all such factors,
factors which could cause actual results to differ materially from those
estimated by HealthSouth include, but are not limited to: the investigation by
the Department of Justice into HealthSouth's financial reporting and related
activity calling into question the accuracy of the Company's previously filed
financial statements; the outcome of pending litigation relating to these
matters; significant changes in HealthSouth's management team; HealthSouth's
ability to successfully refinance its existing indebtedness as it becomes due;
HealthSouth's ability to continue to operate in the ordinary course and manage
its relationships with its creditors, including its lenders, bondholders,
vendors and suppliers, employees and customers; HealthSouth's ability to
successfully remediate its internal control weaknesses; changes, delays in or
suspension of reimbursement for HealthSouth's services by governmental or
private payors; changes in the regulation of the healthcare industry at either
or both of the federal and state levels; competitive pressures in the
healthcare industry and HealthSouth's response thereto; HealthSouth's ability
to obtain and retain favorable arrangements with third-party payors;
HealthSouth's ability to attract and retain nurses, therapists, and other
healthcare professionals in a highly competitive environment with often severe
staffing shortages; general conditions in the economy and capital markets; and
other factors which may be identified from time to time in the Company's SEC
filings and other public announcements, including HealthSouth's Form 10-K for
the year ended December 31, 2004.
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