Concentra to redeem $47.5 million 13% notes using bridge loan, amends credit facility

New York, June 26 - Concentra Operating Corp. said it will redeem $47.5 million of its 13% series A and series B senior subordinated notes, 25% of the $190 million currently outstanding.

Funding for the redemption will come from a new $55 million bridge loan which Concentra's parent, Concentra, Inc. has taken out from Salomon Smith Barney and Credit Suisse First Boston.

The loan is for two years, requires no cash interest payments until maturity and is guaranteed by Concentra's primary equity sponsor Welsh Carson Anderson & Stowe.

Proceeds of the loan have been contributed to Concentra as equity.

The Addison, Texas healthcare and disability outsourcing company said the transaction will lower its debt and reduce interest expense.

The transaction is ahead of the Aug. 15, 2002 deadline in the note indenture for this kind of redemption.

In connection with their approval of the bridge loan and redemption transactions, Concentra's lenders under its $475 million senior credit facility also approved modifications to Concentra's financial covenants which allow for more financial flexibility.

The modifications provide for increased leverage and decreased interest coverage requirements for the periods beginning with the second quarter of 2002 and ending with the fourth quarter of 2004, the company said.

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