Medical Facilities Corporation

Medical Facilities Corporation

March 25, 2008 15:46 ET

Medical Facilities Corporation Announces $43.0 Million Offering of Convertible Debentures

TORONTO, ONTARIO--(Marketwire - March 25, 2008) -


Medical Facilities Corporation ("Medical Facilities") (TSX:DR.UN) announces today that it has entered into an agreement to sell, on a bought deal basis, $43,000,000 aggregate principal amount of convertible unsecured subordinated debentures of Medical Facilities (the "Debentures") to a syndicate of underwriters led by National Bank Financial Inc.

The proceeds from the sale of the Debentures will be used by Medical Facilities, directly or indirectly, for repayment of the funds borrowed on its acquisition line to complete the acquisitions of the Barranca Surgery Center and Surgery Center of Newport Coast medical facilities.

The Debentures bear an interest rate of 7.5% per annum payable semi-annually in arrears on October 31 and April 30 in each year commencing on October 31, 2008, and will mature on April 30, 2013 (the "Maturity Date"). The Debentures will be convertible at the holder's option into IPS units of Medical Facilities (the "IPS Units") at any time prior to the earlier of the Maturity Date and the date fixed for redemption at a conversion price of $13.10 per IPS Unit (the "Conversion Price"), being a ratio of approximately 76.3359 IPS Units per $1,000 principal amount of Debentures. The Debentures will not be redeemable before April 30, 2011. On and after April 30, 2011 and prior to the Maturity Date, the Debentures may be redeemed in whole or in part from time to time at Medical Facilities option provided that the volume weighted average trading price for the IPS Units is not less than 125% of the Conversion Price.

The Debentures will be offered in all provinces and territories of Canada. The offering is subject to normal regulatory approval and is expected to close on or about April 15, 2008.

The Debentures and the underlying IPS Units have not been and will not be registered under the United States Securities Act of 1933 and accordingly will not be offered, sold or delivered, directly or indirectly within the United States, its possessions and other areas subject to its jurisdiction or to, or for the account or for the benefit of a U.S. person, except pursuant to applicable exemptions from the registration requirements.

About Medical Facilities Corporation

Medical Facilities Corporation owns at least 51% interests in four specialty surgical hospitals, located in South Dakota and Oklahoma, as well as 51% interest in two ambulatory surgery centers in California. The specialty hospitals perform scheduled surgical, imaging and diagnostic procedures and derive their revenue from the fees charged for the use of their facilities. The ambulatory surgery centers specialize in outpatient surgical procedures, with patient stays of less than 24 hours. Medical Facilities is structured so that a majority of its free cash flow from operations is distributed to holders of its Income Participating Securities, of which a portion is interest payment on subordinated debt and a portion is dividend. For more information, please visit

Caution Concerning Forward-Looking Statements

Statements made in this news release, other than those concerning historical financial information, may be forward-looking and therefore subject to various risks and uncertainties. Some forward-looking statements may be identified by words like "may", "will", "anticipate", "estimate", "expect", "intend", or "continue" or the negative thereof or similar variations. Certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements. Factors that could cause results to vary include those identified in Medical Facilities' filings with Canadian securities regulatory authorities such as legislative or regulatory developments, intensifying competition, technological change and general economic conditions. All forward-looking statements presented herein should be considered in conjunction with such filings. Medical Facilities does not undertake to update any forward-looking statements; such statements speak only as of the date made.

Contact Information

  • Medical Facilities Corporation
    Michael Salter
    Chief Financial Officer
    (416) 848-7380 or 1-877-402-7162
    The Equicom Group Inc.
    Bruce Wigle
    Investor Relations
    (416) 815-0700 ext. 228 or 1-800-385-5451 ext. 228