ORLANDO — Continuing its previously announced refinancing plan, Rotech said Friday that it has raised $290 million in a sale of senior second lien notes in the 144a private placement market.
The national provider — which operates approximately 425 branches in 48 states, primarily in non-urban markets — said it intends to use the proceeds to repay all of its senior subordinated notes due in 2012 and for general corporate purposes, "including funding the company's strategic priorities."
As of September, the company had approximately $513.4 million of long-term debt, including $225.8 million under its senior credit facility and $287 million of senior subordinated notes that mature in April 2012. After refinancing its senior credit facility in October with $230 million in notes due in 2015, CEO Philip Carter said in a release the company was also looking to refinance its senior subordinated debt "as soon as possible."
After being awarded 17 contracts in Round 1 of competitive bidding, Carter said last July that the company expected application of the bid rates to its existing patient base would reduce revenue "by approximately $900,000 in the first quarter of 2011." However, he noted, market share gains "in the cities where we were awarded contracts will more than offset the reductions in reimbursement rates over time."
Earlier this month, Rotech reported net revenues for 2010 grew to $496.4 million from $479.9 million in 2009.