OHI 2005 Add-on Note Offering
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of
report (Date of earliest event reported): December 1, 2005
OMEGA
HEALTHCARE INVESTORS, INC.
(Exact
name of registrant as specified in charter)
Maryland
|
1-11316
|
38-3041398
|
(State
of incorporation)
|
(Commission
File Number)
|
(IRS
Employer
Identification
No.)
|
9690
Deereco Road
Suite
100
Timonium,
Maryland 21093
(Address
of principal executive offices / Zip Code)
(410)
427-1700
(Registrant’s
telephone number, including area code)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
Written
communications pursuant to Rule 425 under the Securities Act.
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act.
Pre-commencement
communications pursuant to Rule 14d—2(b) under the Exchange Act.
Pre-commencement
communications pursuant to Rule 13e—4(c) under the Exchange Act.
Item
1.01 Entry
into a Material Definitive Agreement
The
disclosure contained in “Item 2.03 Creation of a Direct Financial Obligation or
an Obligation under an Off-Balance Sheet Arrangement of a Registrant” and
Exhibit 4.1 to this Current Report on Form 8-K are incorporated in this Item
1.01 by reference.
Item
2.03 Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant
7%
Senior Notes due 2014
On
December 2, 2005, Omega Healthcare Investors, Inc. (“Omega”) issued $50 million
aggregate principal amount of 7% Senior Notes due 2014 (the “Notes”) of Omega
through a private placement to qualified institutional buyers pursuant to Rule
144A and in offshore transactions pursuant to Regulation S, promulgated under
the Securities Act of 1933, as amended (the “Securities Act”). The Notes were
sold pursuant to a Purchase Agreement, dated November 28,
2005,
by
and among Omega and its subsidiaries, as guarantors, to Deutsche Bank Securities
Inc., Banc of America Securities LLC and UBS Securities LLC (collectively,
the
“Initial Purchasers”), a copy of which is filed herewith as Exhibit 99.1 to this
Current Report on Form 8-K and incorporated in this Item 2.03 by reference.
The
Notes were sold at an issue price of 100.25% of the principal amount of the
notes, resulting in gross proceeds to Omega of $50.125 million.
The Notes bear an interest rate of 7%, payable semi-annually in arrears on
April
1 and October 1 of each year, commencing on April 1, 2005. Interest on the
Notes
will accrue from October 1, 2005. The Notes mature on April 1, 2014. The Notes
are unconditionally guaranteed, jointly and severally, on a senior unsecured
basis by Omega and its subsidiaries until certain conditions are met.
The
Notes
are Omega’s unsecured senior obligations and rank equally with all of Omega’s
existing and future senior debt, and senior to all of Omega’s existing and
future subordinated debt. The Notes are, and will be, effectively subordinated
to Omega’s existing and future secured debt. The Notes are, and will be,
unconditionally guaranteed by Omega’s existing and future subsidiaries that
guarantee Omega’s Senior Credit Facility (as defined below) or any of Omega’s
other indebtedness. These guarantees are unsecured senior obligations of the
guarantors and rank equally with existing and future unsecured senior debt
of
such guarantors, and senior to all existing and future subordinated debt of
such
guarantors. The guarantees are effectively subordinated to existing and future
secured debt of the guarantors.
Omega
intends to use the net proceeds from the sale of the Notes to (i) repay a
portion of its outstanding indebtedness under its Credit Agreement, dated as
of
March 22, 2004, (as amended from time to time, the “Senior Credit Facility”),
among OHI Asset, LLC, OHI Asset (ID), LLC, OHI Asset (LA), LLC, OHI Asset (TX),
LLC, OHI Asset (CA), LLC, Delta Investors I, LLC, Delta Investors II, LLC,
the
lenders identified therein and Bank of America, N.A., as Administrative Agent,
(ii) for working capital and general corporate purposes and (iii) to pay related
fees and expenses. Bank of America, N.A. is an affiliate of Banc of America
Securities LLC. In addition, each of the other Initial Purchasers serve in
various agent capacities under the Senior Credit Facility.
The
Notes
are issued pursuant to an Indenture dated as of March 22, 2004 (the “Indenture”)
between Omega and U.S. Bank National Association, as trustee (the “Trustee”), as
supplemented by a First Supplemental Indenture dated as of July 20, 2004, a
Second Supplemental Indenture dated as of November 5, 2004 and a Third
Supplemental Indenture dated as of December 1, 2005. Omega has previously issued
$260 million aggregate principal amount of 7% Senior Notes due 2014 (the
“Initial Notes”), pursuant to the Indenture, and the Indenture permits Omega to
issue additional notes from time to time. The Notes, together with the Initial
Notes, constitute part of a single class of securities. Additionally, the Notes
and the Initial Notes have identical terms, except as otherwise provided in
the
Indenture and Registration Rights Agreement (as defined below). Immediately
after giving effect to the issuance of the Notes, Omega had outstanding
$310 million
aggregate principal amount of its 7% Senior Notes due 2014.
The
terms
of the Notes, summarized below, are governed by the Indenture. The Indenture
contains certain covenants that limit the ability of Omega and its Restricted
Subsidiaries (as defined therein) to, among other things, incur debt; incur
secured debt; make certain dividend payments, distributions and investments;
enter into certain transactions, including transactions with affiliates;
restrict dividends or other payments from subsidiaries; merge, consolidate
or
transfer all or substantially all of their respective assets; and sell assets.
Upon the occurrence of certain types of changes of control, the Indenture
requires Omega to make an offer to repurchase the Notes at 101% of the principal
amount thereof, plus any accrued and unpaid interest to the repurchase date,
unless certain conditions are met.
Except
as
described below, Omega does not have any right to redeem the Notes prior to
April 1, 2009. The Indenture allows the Issuers to redeem the Notes, in whole
at
any time or in part from time to time, at redemption prices of 103.5%, 102.333%
and 101.167% of the principal amount thereof if the redemption occurs during
the
respective 12-month periods beginning on April 1 of the years 2009, 2010 and
2011, respectively, and at a redemption price of 100% of the principal amount
thereof on and after April 1, 2012, in each case, plus any accrued and unpaid
interest to the redemption date. In addition, Omega may redeem up to 35% of
the
Notes before April 1, 2007 with net cash proceeds from certain equity offerings
at a redemption price of 107% of the principal amount of the Notes to be so
redeemed, plus any accrued and unpaid interest to the redemption
date.
The
Indenture contains customary events of default including, without limitation,
failure to make required payments, failure to comply with certain agreements
or
covenants, cross-defaults to certain other indebtedness in excess of specified
amounts, certain events of bankruptcy and insolvency, and failure to pay certain
judgments. An event of default under the Indenture will allow either the Trustee
or the holders of at least 25% in principal amount of the then outstanding
Notes
to accelerate, or in certain cases, will automatically cause the acceleration
of, the amounts due under the Notes.
The
foregoing description of the Notes and the Indenture, as supplemented, is
qualified by reference in its entirety to the (i) Indenture, a copy of which
has
been previously filed as Exhibit 10.2 to Omega’s Current Report on Form 8-K
filed on March 26, 2004, (ii) the First Supplemental Indenture, a copy of which
was filed as Exhibit 4.8 to the First Amendment to Omega’s Registration
Statement on Form S-4 filed on July 26, 2004, (iii) the Second Supplemental
Indenture, a copy of which is filed as Exhibit 4.2 to Omega’s Current Report on
Form 8-K filed on November 9, 2004, (iv) the Third Supplemental Indenture,
a
copy of which is filed herewith as Exhibit 4.2 to this Current Report on Form
8-K. Omega and certain of its subsidiaries entered into the Third Supplemental
Indenture on December 1, 2005 to add additional subsidiaries of Omega as
guarantors under the Indenture and reflect the merger of certain subsidiaries
with and into other subsidiaries of Omega.
Registration
Rights Agreement
On
December 2, 2005, Omega, its subsidiaries and the Initial Purchasers entered
into a Registration Rights Agreement (the “Registration Rights Agreement”),
pursuant to which Omega and its subsidiaries agreed to file with the Securities
and Exchange Commission (the “Commission”) a registration statement (the
“Exchange Offer Registration Statement”) under the Securities Act relating to
the registration of a new series of 7% Senior Notes due 2014 (the “Exchange
Notes”), with terms substantially similar to the Notes, within ninety (90) days
following the issuance of the Notes. Upon the effectiveness of the Exchange
Offer Registration Statement, Omega and its subsidiaries, pursuant to an
exchange offer (the “Exchange Offer”), are required to offer to the holders of
the Notes who are able to make certain representations the opportunity to
exchange their Notes for Exchange Notes. Omega and its subsidiaries are required
to use their commercially reasonable efforts to have the Exchange Offer
Registration Statement declared effective by the Commission on or prior to
180
days after December 2, 2005. Unless the Exchange Offer would not be permitted
by
applicable law or Commission policy, Omega and its subsidiaries must commence
the Exchange Offer and use their best efforts to issue within 30 business days,
or longer if required by the federal securities laws, after the date on which
the Exchange Offer Registration Statement is declared effective by the
Commission, Exchange Notes in exchange for all Notes tendered prior thereto
in
the Exchange Offer. If the Exchange Offer is prohibited by applicable law or
Commission policy, or is otherwise not consummated within 210 days following
the
issuance of the Notes, Omega and its subsidiaries are required to file with
the
Commission a shelf registration statement (“Shelf Registration Statement”) to
cover resales of the Notes by the holders of the Notes who satisfy certain
conditions relating to the provision of information in connection with such
Shelf Registration Statement. If so obligated, Omega and its subsidiaries are
required to use their best efforts to file the Shelf Registration Statement
with
the Commission on or prior to 45 days after such filing obligation arises and
to
cause such shelf registration to be declared effective by the Commission on
or
prior to 60 days after such shelf registration was filed.
If
Omega
and its subsidiaries fail to satisfy any of the obligations described above
on a
timely basis, Omega and its subsidiaries are required to pay liquidated damages
in the form of additional interest on the Notes to the holders of the Notes
under certain circumstances. Omega and its subsidiaries must pay liquidated
damages on the Notes if: (i) the Exchange Offer Registration Statement is not
filed with the Commission within ninety (90) days following the issuance of
the
Notes, (ii) the Commission does not declare the Exchange Offer Registration
Statement effective on or prior to the 180th
day
following the issuance of the Notes, or (iii) the Exchange Offer is not
consummated on or prior to the 30th
business
day following the date of effectiveness of the Exchange Offer Registration
Statement.
The
foregoing description of the Registration Rights Agreement is qualified by
reference in its entirety to the Registration Rights Agreement, a copy of which
is filed herewith as Exhibit 4.1 and incorporated in this Item 2.03 by
reference.
Item
8.01 Other
Events
On
December 1, 2005, AHC Properties, Inc., a subsidiary of Alterra Healthcare
Corporation (“Alterra”), exercised its option to purchase six assisted living
facilities (“ALFs”) for approximately $20.4 million. The ALFs were leased to
Alterra under a master lease with annual revenue of approximately $1.7 million.
On September 30, 2005, the net book value of these ALFs was $15.4 million.
Item
9.01 Exhibits
4.1 Registration
Rights Agreement, dated as of December 2, 2005, by and among Omega Healthcare,
the Guarantors named therein, and Deutsche Bank Securities Inc., Banc of America
Securities LLC and UBS Securities LLC, as Initial Purchasers.
4.2 Third
Supplemental Indenture, dated as of December 1, 2005, among Omega Healthcare
Investors, Inc., each of the subsidiary guarantors listed on Schedule I thereto,
OHI Asset (OH) New Philadelphia, LLC, OHI Asset (OH) Lender, LLC, OHI Asset
(PA)
Trust and U.S. Bank National Association, as trustee.
99.1 Purchase
Agreement, dated November 28,
2005,
by and among Omega and its subsidiaries, as guarantors, and Deutsche Bank
Securities Inc., Banc of America Securities LLC and UBS Securities LLC, as
Initial Purchasers.
SIGNATURES
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 thereunto
duly authorized.
OMEGA
HEALTHCARE INVESTORS, INC.
(Registrant)
Dated:
December 2, 2005 By: /s/
C.
Taylor Pickett
C.
Taylor Pickett
President
and Chief Executive Officer