Select Medical Holdings Corporation filed SEC Form 8-K: Entry into a Material Definitive Agreement, Creation of a Direct Financial Obligation, Other Events, Financial Statements and Exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
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FORM
current report
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Item 1.01 Entry into a Material Definitive Agreement.
6.250% Senior Notes due 2032
On December 3, 2024, Select Medical Corporation (“Select”), a wholly owned subsidiary of Select Medical Holdings Corporation (“Holdings”), issued and sold $550 million aggregate principal amount of its 6.250% Senior Notes due 2032 (the “Notes”). The Notes and related guarantees were offered and sold in a private transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), to persons reasonably believed to be qualified institutional buyers in accordance with Rule 144A under the Securities Act and outside the United States to certain non-U.S. persons in compliance with Regulation S under the Securities Act pursuant to an Indenture (the “Indenture”), dated December 3, 2024, by and among Select, the guarantors named therein and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). The issuance and sale of the Notes and related guarantees have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction, and the Notes and related guarantees may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and other applicable securities laws.
Interest on the Notes accrues at the rate of 6.250% per annum and is payable semi-annually in cash in arrears on June 1 and December 1 of each year, commencing on June 1, 2025. The Notes will be Select’s senior unsecured obligations and are:
| · | effectively subordinated to all of Select’s existing and future secured indebtedness, including Select’s senior secured credit facilities, to the extent of the value of the assets securing such indebtedness; |
| · | rank equal in right of payment to all of Select’s existing and future indebtedness that are not, by their terms, expressly subordinated in right of payment to the Notes; |
| · | rank senior in right of payment to all of Select’s existing and future indebtedness that are, by their terms, expressly subordinated in right of payment to the Notes; and |
| · | structurally subordinated to any existing and future indebtedness of any of Select’s subsidiaries that are not subsidiary guarantors. |
The Notes are unconditionally guaranteed on a joint and several basis by each of Select’s direct or indirect existing and future domestic restricted subsidiaries other than certain non-guarantor subsidiaries.
Select may redeem some or all of the Notes prior to December 1, 2027 by paying a “make-whole” premium. Select may redeem some or all of the Notes on or after December 1, 2027 at specified redemption prices. In addition, prior to December 1, 2027, Select may redeem up to 40% of Notes with the net proceeds of certain equity offerings at a price of 106.250% pulse accrued and unpaid interest, if any. Select is obligated to offer to repurchase the Notes at a price of 101% of their principal amount plus accrued and unpaid interest, if any, as a result of certain change of control events. These restrictions and prohibitions are subject to certain qualifications and exceptions.
The Indenture contains covenants limiting the ability of Select and Select’s restricted subsidiaries to, among other things, incur additional indebtedness, pay dividends or distributions or redeem or purchase stock, make certain investments, create liens, merge or consolidate with another company or transfer or sell assets, enter into agreements restricting the ability of the Select’s restricted subsidiaries to make distributions, loans or advances to Select or to other restricted subsidiaries, and enter into certain transactions with affiliates.
The foregoing descriptions of the Indenture, the Notes and related guarantees do not purport to be complete and are qualified in their entirety by reference to the Indenture and form of Note, copies of which are filed as Exhibits 4.1 and 4.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
Amendment No. 11 to the Select Credit Agreement
On December 3, 2024, Select and Holdings entered into Amendment No. 11 (the “Select Amendment”) to that certain Credit Agreement, dated as of March 6, 2017, by and among the Company, SMC, the lenders and issuing banks party thereto from time to time and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent (as amended by Amendment No. 1, dated as of March 22, 2018, Amendment No. 2 dated as of October 26, 2018, Amendment No. 3, dated as of August 1, 2019, Amendment No. 4, dated as of December 10, 2019, Amendment No. 5, dated as of June 2, 2021, Amendment No. 6, dated as of February 21, 2023, Amendment No. 7, dated as of May 31, 2023, Amendment No. 8, dated as of July 31, 2023, Amendment No. 9, dated as of August 31, 2024, Amendment No. 10, dated July 26, 2024 and the Select Amendment, the “Select Credit Agreement”). Among other things, the Select Amendment: (i) established a new incremental term loan under the Select Credit Agreement in the aggregate principal amount of $1,050.0 million, (ii) extended the tenor of Select’s revolving credit facility to five years from the closing of the Notes offering, (iii) provided for an incremental revolving commitment in an aggregate principal amount of $50.0 million, and (iv) made certain other amendments to the Credit Agreement.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under and Off-Balance Sheet Arrangement of a Registrant.
The disclosures above under Item 1.01 of this Current Report are also responsive to Item 2.03 of this Current Report and are hereby incorporated by reference into this Item 2.03.
Item 8.01 Other Events
On December 3, 2024, Holdings issued a press release announcing Select had closed the offering of $550 million aggregate principal amount of 6.250% Senior Notes due 2032. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
SIGNATURE
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.
| SELECT MEDICAL HOLDINGS CORPORATION | ||
| Date: December 4, 2024 | By: | /s/ Michael E. Tarvin |
| Michael E. Tarvin | ||
| Senior Executive Vice President, General Counsel and Secretary | ||