Encompass Health Issues $100M 5.875% Senior Notes Due 2034

What Happened
On August 13, 2026, Encompass Health Corporation announced it completed a private offering of $100 million aggregate principal amount of its 5.875% Senior Notes due 2034 (the “Additional Notes”). The Additional Notes were sold at a purchase price of 98.75% of par, producing approximately $96.9 million in net proceeds after the initial purchasers’ discount and estimated offering expenses. The company used those proceeds, together with cash on hand, to repay a portion of outstanding amounts under its revolving credit facility. The Additional Notes are issued under the indenture dated May 29, 2026, and are identical in terms to the $500 million of 5.875% Senior Notes due 2034 issued on May 29, 2026.

Key Details

• Offering size: $100,000,000 in Additional 5.875% Senior Notes due 2034.
• Price & proceeds: Sold at 98.75% of par; net proceeds ≈ $96.9 million after discounts and expenses.
• Use of proceeds: Repayment of a portion of the company's revolving credit facility (together with cash on hand).
• Treatment / ranking: Additional Notes have identical terms to the $500 million series issued May 29, 2026; they rank pari passu and are treated as a single class under the indenture. Resales by initial purchasers will rely on Rule 144A (QIBs) and Regulation S (non-U.S. persons).

Why It Matters
This transaction increases Encompass Health’s outstanding long-term senior notes of this series to $600 million (the $500M issued May 29, 2026 plus this $100M issuance), extending funded debt with a fixed 5.875% coupon through 2034 while reducing short‑term revolver borrowings. For investors, that means a modest shift in the company’s capital structure toward longer‑dated fixed-rate debt and an immediate reduction in revolver outstanding balances, which can affect liquidity availability and interest expense profile. The notes were issued in a private placement format (Rule 144A / Reg S), so they were sold to institutional and non-U.S. investors rather than through a registered public offering.