Encompass Health Corporation
01/25/2022 | Press release | Distributed by Public on 01/25/2022 16:11
Material Definitive Agreement - Form 8-K
ehc-20220124
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): January 24, 2022
Encompass Health Corporation
(Exact name of Registrant as specified in its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
| 001-10315 | 63-0860407 |
| (Commission File Number) | (IRS Employer Identification No.) |
9001 Liberty Parkway, Birmingham, Alabama35242
(Address of Principal Executive Offices, Including Zip Code)
(205) 967-7116
(Registrant's Telephone Number, Including Area Code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ |
Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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| ☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934. Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Stock, par value $0.01 per share | EHC | New York Stock Exchange |
Item 1.01. Entry into a Material Definitive Agreement.
On January 25, 2022, Encompass Health Corporation (the "Company") announced the expiration on January 24, 2022 of its solicitation of consents (the "Consent Solicitation") from the holders of its 4.50% Senior Notes due 2028 (the "2028 Notes"), 4.75% Senior Notes due 2030 (the "2030 Notes") and 4.625% Senior Notes due 2031 (the "2031 Notes" and, together with the 2028 Notes and the 2030 Notes, the "Notes") having received the requisite consents for the adoption of certain amendments to each Existing Indenture (defined below) governing the Notes.
On January 24, 2022, the Company and certain of its subsidiaries entered into the Twelfth Supplemental Indenture (the "Twelfth Supplemental Indenture") to amend the previously executed Indenture, dated as of December 1, 2009 (the "Base Indenture"), between the Company and Wells Fargo Bank, National Association, as successor to The Bank of Nova Scotia Trust Company of New York, as trustee (the "Trustee"), as previously supplemented by (i) with respect to the 2028 Notes, the Eighth Supplemental Indenture, dated September 18, 2019 (the "Eighth Supplemental Indenture,"), (ii) with respect to the 2030 Notes, the Ninth Supplemental Indenture, dated September 18, 2019 (the "Ninth Supplemental Indenture") and (iii) with respect to the 2031 Notes, the Tenth Supplemental Indenture, dated October 5, 2020 (the "Tenth Supplemental Indenture"), in each case, among the Company, the subsidiary guarantors named therein, and the Trustee. The Base Indenture, together with, as applicable in the case of the relevant series of Notes, the Eighth Supplemental Indenture, the Ninth Supplemental Indenture or the Tenth Supplemental Indenture, as applicable, is referred to herein as an "Existing Indenture," and each Existing Indenture as supplemented by the Twelfth Supplemental Indenture is referred to herein as an "Indenture".
Each Existing Indenture contains restrictive covenants that, among other things, limit the Company's ability and the ability of certain of its subsidiaries to make certain asset dispositions, investments, and distributions to holders of the Company's capital stock. The amendments to the Existing Indentures permit, subject to the leverage ratio condition set forth below, the Company to distribute to the Company's equity holders in one or more transactions (a "Distribution") some or all of the common stock of a subsidiary that holds substantially all of the assets of the Company's home health and hospice business. The Company may make any such distribution so long as the Leverage Ratio (as defined in each Indenture) is no more than 3.5 to 1.0 on a pro forma basis after giving effect thereto. The amendments also reduce the capacity under the Company's restricted payments builder basket under each Existing Indenture by $200 million. Additionally, the Twelfth Supplemental Indenture amends the definition of "Consolidated Net Income" to allow the Company to exclude from Consolidated Net Income (a component of the Leverage Ratio) any fees, expenses or charges related to any Distribution and the solicitation of consents from the holders of the Notes and the holders of the Company's 5.750% Senior Notes due 2025.
The descriptions of the provisions of the Base Indenture, the Eighth Supplemental Indenture, the Ninth Supplemental Indenture, the Tenth Supplemental Indenture and the Twelfth Supplemental Indenture are summary in nature and are qualified in their entirety by reference to the provisions of the definitive agreements. The Base Indenture was filed as an exhibit to the Company's Annual Report on Form 10‑K for the year ended December 31, 2009 and is incorporated herein by reference. The Eighth Supplemental Indenture, which includes the form of the 2028 Notes, was filed on September 18, 2019 as Exhibit 4.2 to the Company's Current Report on Form 8-K and is incorporated herein by reference. The Ninth Supplemental Indenture, which includes the form of the 2030 Notes, was filed on September 18, 2019 as Exhibit 4.3 to the Company's Current Report on Form 8-K and is incorporated herein by reference. The Tenth Supplemental Indenture, which includes the form of the 2031 Notes, was filed on October 5, 2020 as Exhibit 4.2 to the Company's Current Report on Form 8-K and is incorporated herein by reference. The Twelfth Supplemental Indenture is attached hereto as Exhibit 4.5 and is incorporated herein by reference.
Item 3.03. Material Modification to Rights of Security Holders.
The information included in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| Exhibit Number | Description |
|
4.5
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Twelfth Supplemental Indenture, dated as of January 24, 2022, by and among the Company, the subsidiary guarantors named therein and the Trustee (relating to the 4.500% Notes due 2028, 4.750% Notes due 2030 and 4.625% Notes due 2031).
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| 104 | Cover Page Interactive Data File - the cover page iXBRL tags are embedded within the Inline XBRL document. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
| ENCOMPASS HEALTH CORPORATION | |
| By: |
/S/ Patrick Darby
|
| Name: | Patrick Darby |
| Title: | Executive Vice President, General Counsel and Secretary |
Dated: January 25, 2022