Rotech Raises $290M

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.