Encompass Health Prices $500M of 5.875% Senior Notes Due 2034
Encompass Health priced a private offering of $500 million of 5.875% senior notes due 2034 at par, closing expected May 29, 2026. The company will use proceeds plus available cash to redeem $400 million of 4.500% notes due 2028 and repay $100 million of revolver balances, covering related fees.
1. Pricing of Senior Notes
Encompass Health has priced $500 million of 5.875% senior unsecured notes due 2034 at 100% of par, with interest paid semiannually beginning December 1, 2026. The notes are jointly and severally guaranteed by existing and future subsidiaries and are expected to close on May 29, 2026, subject to customary conditions.
2. Use of Proceeds
Net proceeds from the offering, together with available cash on hand, will redeem $400 million of 4.500% senior notes due 2028, repay $100 million under the senior secured revolving credit facility and cover related fees and expenses.
3. Impact on Debt Profile and Interest Expense
The refinancing extends the company’s debt maturity by six years while increasing the coupon from 4.5% to 5.875%, raising annual interest costs. This transaction boosts liquidity and shifts near-term repayment obligations further into the future at a higher cost of capital.