Item 1.01. Entry into a Material Definitive Agreement.

On May 15, 2020, Encompass Health Corporation (the "Company") completed the public offering of $300,000,000 aggregate principal amount of the Company's 4.500% Senior Notes due 2028 (the "Additional 2028 Notes") and $300,000,000 aggregate principal amount of the Company's 4.750% Senior Notes due 2030 (the "Additional 2030 Notes" and, together with the Additional 2028 Notes, the "Additional Notes"), which Additional Notes are guaranteed on a senior unsecured basis by certain of the Company's subsidiaries (the "Guarantors"). The Additional Notes and related guarantees have been registered with the Securities and Exchange Commission (the "SEC") under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to the Company's and the Guarantors' shelf registration statement on Form S-3, as amended (File No. 333-220519), as supplemented by the Company's and the Guarantors' prospectus supplement dated May 12, 2020, previously filed with the SEC under the Securities Act.

The terms of the Additional 2028 Notes are governed by the previously executed Indenture, dated as of December 1, 2009 (the "Base Indenture"), between the Company and Wells Fargo Bank, National Association, as successor to The Bank of Nova Scotia Trust Company of New York, as trustee (the "Trustee"), and the Eighth Supplemental Indenture, dated September 18, 2019 (the "Eighth Supplemental Indenture"), among the Company, the subsidiary guarantors named therein, and the Trustee. The terms of the Additional 2030 Notes are governed by the Base Indenture and the Ninth Supplemental Indenture, dated September 18, 2019 (the "Ninth Supplemental Indenture" and together with the Eighth Supplemental Indenture and the Base Indenture, the "Indenture"), among the Company, the subsidiary guarantors named therein, and the Trustee.

The Additional 2028 Notes represent a further issuance of the Company's 4.500% Senior Notes due 2028, of which $500,000,000 aggregate principal amount was issued on September 18, 2019 (the "Existing 2028 Notes"). The Additional 2030 Notes represent a further issuance of the Company's 4.750% Senior Notes due 2030, of which $500,000,000 aggregate principal amount was issued on September 18, 2019 (the "Existing 2030 Notes" and, together with the Existing 2028 Notes, the "Existing Notes"). Other than with respect to the date of issuance, public offering price and first interest payment date, the Additional Notes of each series have identical terms as the Existing Notes of such series. The Additional 2028 Notes and the Additional 2030 Notes are treated as a single series with the Existing 2028 Notes and the Existing 2030 Notes, respectively, for all purposes under the Indenture, including notices, consents, waivers, amendments, redemptions and any other action permitted under the Indenture, and rank pari passu with the Existing Notes of such series. The New 2028 Notes have the same CUSIP and ISIN numbers as, and vote together and are fungible with, the Existing 2028 Notes. The New 2030 Notes have the same CUSIP and ISIN numbers as, and vote together and are fungible with, the Existing 2030 Notes.

The following is a brief description of the terms of the Additional Notes and the Indenture.

Maturity and Interest Payment Dates

Interest on the Additional Notes is payable semi-annually in arrears on February 1 and August 1 of each year, commencing on August 1, 2020. The 2028 Notes will mature on February 1, 2028, and the 2030 Notes will mature on February 1, 2030. Interest on the 2028 Notes will accrue at the rate of 4.500% per annum, and interest on the 2030 Notes will accrue at the rate of 4.750% per annum. Interest on the Additional Notes will accrue from February 1, 2020.

Redemption

As set forth in the Eighth Supplemental Indenture, the Company may redeem some or all of the Additional 2028 Notes (i) on or after February 1, 2023, at the redemption prices specified in the Eighth Supplemental Indenture, or (ii) prior to February 1, 2023, at a redemption price equal to 100% of the aggregate principal amount therefor, plus accrued and unpaid interest, if any, to the redemption date plus a "make-whole" premium. At any time prior to February 1, 2023, the Company may redeem up to 35% of the aggregate principal amount of the Additional 2028 Notes in an amount not to exceed the amount of proceeds of one or more equity offerings, at a price equal to 104.50% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, provided that at least 65% of the original aggregate principal amount of the Additional 2028 Notes issued remains outstanding after the redemption.

--------------------------------------------------------------------------------

As set forth in the Ninth Supplemental Indenture, the Company may redeem some or all of the Additional 2030 Notes (i) on or after February 1, 2025, at the redemption prices specified in the Ninth Supplemental Indenture, or (ii) prior to February 1, 2025, at a redemption price equal to 100% of the aggregate principal amount therefor, plus accrued and unpaid interest, if any, to the redemption date plus a "make-whole" premium. At any time prior to February 1, 2025, the Company may redeem up to 35% of the aggregate principal amount of the Additional 2030 Notes in an amount not to exceed the amount of proceeds of one or more equity offerings, at a price equal to 104.75% of the principal amount thereof, plus accrued and unpaid interest, if any, to the redemption date, provided that at least 65% of the original aggregate principal amount of the Additional 2030 Notes issued remains outstanding after the redemption.

Guarantees

The Additional Notes are jointly and severally guaranteed on a senior, unsecured basis by all of the Company's existing and future subsidiaries that guarantee borrowings under its credit agreement and other capital markets debt.

Ranking

The Additional Notes rank, along with the related guarantees, equal in right of payment to the Company's current and future senior debt and senior in right of payment to any future subordinated debt. The Additional Notes are effectively subordinated to the Company's current and future secured debt, to the extent of the value of the assets securing such debt, and any liabilities of the Company's nonguarantor subsidiaries.

Covenants

The Indenture relating to the Additional Notes contains restrictive covenants that, among other things, limit the Company's ability and the ability of certain of its subsidiaries to, among other things, incur or guarantee additional indebtedness; pay dividends on, or redeem or repurchase, its capital stock; make investments; and merge, consolidate, or transfer all or substantially all of its assets.

Change of Control

Upon the occurrence of a change of control, as defined in the Indenture, each holder of the Additional Notes has the right to require the Company to repurchase some or all of such holder's Additional Notes at a purchase price in cash equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase.

Events of Default

The Indenture also provides for events of default which, if any of them occurs, would permit or require the principal of and accrued interest on the Additional . . .

Item 2.03. Creation of a Direct Financial Obligation or an Obligation Under an


           Off-Balance Sheet Arrangement.

The information included in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.

--------------------------------------------------------------------------------

Item 8.01. Other Events.

On May 12, 2020, the Company and the Guarantors entered into an underwriting agreement (the "Underwriting Agreement") with BofA Securities, Inc., acting on behalf of itself and as representative of the several underwriters named therein (collectively, the "Underwriters"), and the Underwriters, pursuant to which the Company agreed to issue and sell to the Underwriters the Additional Notes in an underwritten public offering. The Underwriting Agreement contains customary representations, warranties and covenants of the Company and the Guarantors, conditions to closing, indemnification obligations of the Company and the Guarantors and the Underwriters, and termination and other customary provisions. The Additional Notes have been issued and sold pursuant to the Registration Statement and the related prospectus supplement dated May 12, 2020.

The Company intends to use the net proceeds from the sale of the Additional Notes, together with cash on hand, to repay $350 million of outstanding borrowings under the Company's revolving credit facility, with the remaining net proceeds to be used for working capital and other general corporate purposes, which may include repayment of outstanding indebtedness. Pending the use of the net proceeds as described herein, the Company intends to use the net proceeds from the sale of the Additional Notes to invest in short-term interest-bearing instruments.

The foregoing description of the Underwriting Agreement is not intended to be complete and is qualified in its entirety by reference to the Underwriting Agreement, a copy of which is attached hereto as Exhibit 1.1 and is incorporated herein by reference.

The Underwriters and certain of their affiliates have performed, and may in the future perform, various commercial and investment banking and financial advisory services for the Company and its affiliates, for which they have received or may in the future receive customary fees and expenses. The Underwriters and/or certain of their affiliates act as agents and/or lenders under the Company's credit agreement and receive and are expected to receive customary fees for their services as well as reimbursement for certain expenses.

Wells Fargo Bank, National Association, which is the Trustee under the Indenture and paying agent and registrar for the Additional Notes, also serves as a lender under the Company's credit agreement. Additionally, an affiliate of Wells Fargo Bank, National Association served as an underwriter in the offering of the Additional Notes. Wells Fargo Bank, National Association and certain of its affiliates have performed, and may in the future perform, various commercial and investment banking and financial advisory services for the Company and its affiliates, for which they have received or may in the future receive customary fees and expenses.



The expenses relating to the offering of the Additional Notes are estimated to
be as follows:

                                 Amount to be paid
SEC Registration Fee:           $            76,907
Accounting Fees and Expenses:   $           100,000
Legal Fees and Expenses:        $           156,000
Printing Expenses:              $            37,000
Trustee's Fees and Expenses:    $            24,000
Rating Agency Fees:             $           846,000
Miscellaneous expenses:         $            55,000

Total:                          $         1,294,907

--------------------------------------------------------------------------------

Item 9.01. Financial Statements and Exhibits.




(d) Exhibits


 Exhibit
 Number          Description of Exhibit

    1.1            Underwriting Agreement, dated May 12, 2020, by and among Encompass
                 Health Corporation, its subsidiary guarantors named therein, BofA
                 Securities, Inc., as representative for the underwriters named
                 therein and for itself, and Barclays Capital Inc., Citigroup Global
                 Markets Inc., Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC,
                 Morgan Stanley & Co. LLC, RBC Capital Markets, LLC, Regions
                 Securities LLC, SunTrust Robinson Humphrey, Inc., Wells Fargo
                 Securities, LLC.

    4.1            Indenture, dated as of December 1, 2009, by and between the
                 Company and the Trustee (incorporated herein by reference to Exhibit
                 4.7.1 to the Company's Annual Report on Form 10-K for the year ended
                 December 31, 2009 filed on February 23, 2010).

    4.2            Eighth Supplemental Indenture, dated as of September 18, 2019, by
                 and among the Company, the Guarantors and the Trustee (relating to
                 the 4.500% Notes due 2028) (incorporated by reference to Exhibit 4.2
                 to the Company's Current Report on Form 8-K filed on September 18,
                 2019).

    4.3            Ninth Supplemental Indenture dated as of September 18, 2019, by
                 and among the Company, the Guarantors and the Trustee (relating to
                 the 4.750% Notes due 2030) (incorporated by reference to Exhibit 4.3
                 to the Company's Current Report on Form 8-K filed on September 18,
                 2019).

    4.4            Form of Global Note representing the Additional 2028 Notes
                 (included in Exhibit 4.2).

    4.5            Form of Global Note representing the Additional 2030 Notes
                 (included in Exhibit 4.3).

    5.1            Opinion of Maynard, Cooper and Gale, P.C.

    5.2            Opinion of Bradley Arant Boult Cummings LLP.

    5.3            Opinion of Hawley Troxell Ennis & Hawley LLP.

    5.4            Opinion of Snell & Wilmer L.L.P.

   23.1            Consent of Maynard, Cooper and Gale, P.C. (included in Exhibit
                 5.1).

   23.2            Consent of Bradley Arant Boult Cummings LLP (included in Exhibit
                 5.2).

   23.3            Consent of Hawley Troxell Ennis & Hawley LLP (included in Exhibit
                 5.3).

   23.4            Consent of Snell & Wilmer L.L.P. (included in Exhibit 5.4).

   104           Cover Page Interactive Data File - the cover page iXBRL tags are
                 embedded within the Inline XBRL document.

--------------------------------------------------------------------------------

© Edgar Online, source Glimpses