SOURCE: Sun Healthcare Group, Inc.

Sun Healthcare Group, Inc.

October 25, 2010 09:00 ET

Sun Healthcare Group, Inc. Announces Pricing of $225 Million Senior Notes Offering by Subsidiaries of Sabra Health Care REIT, Inc.

IRVINE, CA--(Marketwire - October 25, 2010) -  Sun Healthcare Group, Inc. (NASDAQ: SUNH) today announced that subsidiaries of Sabra Health Care REIT, Inc. ("Sabra") have agreed to sell $225 million aggregate principal amount of 8.125 percent senior notes due 2018 (the "Notes") at par in a private placement to "qualified institutional buyers" as defined in Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and outside the United States in reliance on Regulation S under the Securities Act. The sale of the Notes is expected to close on October 27, 2010.

The Notes will be fully and unconditionally guaranteed, jointly and severally, on an unsecured basis, by Sabra and certain of Sabra's other existing and, subject to certain exceptions, future subsidiaries. Sun will also initially guarantee the Notes until completion of its previously announced plan to restructure its business by separating its real estate assets and its operating assets into two separate publicly-traded companies (the "Restructuring").

The net proceeds from the offering will be placed in escrow pending the satisfaction or waiver of certain conditions, including certain conditions to the Restructuring. Upon the satisfaction or waiver of these conditions, the proceeds from the offering will be used, together with cash from Sun, to redeem Sun's existing 9.125 percent senior subordinated notes due 2015, including accrued interest and the redemption premium. 

This press release does not constitute an offer to sell or the solicitation of an offer to buy the Notes nor shall there be any sale of the Notes in any state in which such offer, solicitation or sale would be unlawful. The Notes being offered have not been and will not be registered under the Securities Act or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or pursuant to an applicable exemption from registration requirements.

Forward-Looking Statements 

Statements made in this release that are not historical facts are "forward-looking" statements (as defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties and are subject to change at any time. These forward-looking statements may include, but are not limited to, statements containing words such as "anticipate," "believe," "plan," "estimate," "expect," "hope," "intend," "may" and similar expressions. Factors that could cause actual results to differ are identified in the public filings made by Sun with the Securities and Exchange Commission and include the ability to successfully complete the offering, which may be impacted by, among other things, changes in general economic conditions and volatility in financial and credit markets, as well as other risks and uncertainties, including those detailed from time to time in our Securities and Exchange Commission filings. More information on factors that could affect Sun's business and financial results are included in Sun's public filings made with the Securities and Exchange Commission, including Sun's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, copies of which are available on Sun's web site, www.sunh.com. The forward-looking statements involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond Sun's control. Investors are cautioned that any forward-looking statements made by Sun are not guarantees of future performance and are only made as of the date of this release. Sun disclaims any obligation to update any such factors or to announce publicly the results of any revisions to any of the forward-looking statements to reflect future events or developments.

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