WEST READING, Pa., Aug. 16, 2024 /PRNewswire/ -- Tower Health ("Tower Health") today announced that it has commenced an offer to exchange (the "Exchange Offer") all or any portion of certain outstanding debt securities issued by or on behalf of Tower Health described in the table below (collectively, the "Outstanding Bonds") for a specified amount of new bonds to be issued by The Berks County Municipal Authority (the "Authority"), as identified in the table below (collectively, the "Exchange Bonds"). The Exchange Offer is being made to realign the debt structure of Tower Health and the other members of the Obligated Group (as defined below) and their affiliates to support their acute care hospitals and related healthcare businesses.

The Exchange Offer is further described in the Offer to Exchange and Consent Solicitation Statement dated August 16, 2024 (the "Offer to Exchange and Consent Solicitation Statement") and is subject to the terms and conditions set forth therein.  Information concerning Tower Health and the other members of the Obligated Group and the Exchange Bonds is set forth in the Authority's Preliminary Limited Offering Memorandum dated August 16, 2024 (the "Limited Offering Memorandum") attached as APPENDIX A to the Offer to Exchange and Consent Solicitation Statement.

In connection with the Exchange Offer, Tower Health is also soliciting consents ("Consents") from holders of Outstanding Bonds, upon the terms and subject to the conditions set forth in the Offer to Exchange and Consent Solicitation Statement, to amend and restate the Master Trust Indenture supporting the Outstanding Bonds (the "Consent Solicitation").  Bondholders who tender their Outstanding Bonds in the Exchange Offer will be deemed to have delivered their Consents pursuant to the Consent Solicitation and may not deliver Consents pursuant to the Consent Solicitation without tendering their Outstanding Bonds in the Exchange Offer. 

The following table sets forth the Exchange Amount of each series of Exchange Bonds per each series of Outstanding Bonds:

If the principal amount of the applicable series of Series 2024A-3 Bonds or Series 2024A-4 Bonds or Final Accreted Value (as defined in the Limited Offering Memorandum) after the accretion period of Series 2024B-1 Bonds or Series 2024B-2 Bonds that a bondholder would be entitled to receive would not be an integral multiple of $1,000, such principal amount or Final Accreted Value of the applicable series of Exchange Bonds to be delivered to the bondholder will be as follows:

Subject to the terms and conditions of the Exchange Offer, Tower Health will cause the exchange of Exchange Bonds for Outstanding Bonds tendered for exchange, provided that such Outstanding Bonds (i) tendered for exchange for Exchange Bonds have been validly tendered by 5:00 p.m., New York City time, on September 13, 2024 (as it may be extended from time to time, the "Expiration Date") by holders thereof and accepted by Tower Health at or before 5:00 p.m., New York City time, on September 16, 2024 (as it may be extended from time to time, the "Acceptance Date"), assuming all conditions to the Exchange Offer have then been satisfied or waived by Tower Health on or prior to September 19, 2024 (as it may be extended from time to time, the "Settlement Date"). Bondholders who tender Outstanding Bonds at or prior to 5:00 p.m., New York City time, on the Expiration Date, and whose Outstanding Bonds are accepted for exchange at or prior to 5:00 p.m., New York City time, on the Acceptance Date, will be entitled to receive accrued but unpaid interest on such Outstanding Bonds to, but not including, the Settlement Date.

Concurrently with the Exchange Offer, the Authority is offering $157.5 million aggregate principal amount of its (i) 8.0% Federally Taxable Revenue Bonds (Tower Health Project), Series 2024A-1 (the "Series 2024A-1 Bonds") and (ii) tax-exempt 6.0% Revenue Bonds (Tower Health Project), Series 2024A-2 (the "Series 2024A-2 Bonds" and, together with the Series 2024A-1 Bonds, the "Series 2024A-1/A-2 Bonds" and the Series 2024A-1/A-2 Bonds, collectively with the Exchange Bonds, the "Series 2024A/B Bonds") anticipated to be issued and sold on the Settlement Date to holders of Outstanding Bonds as of August 29, 2024. The Series 2024A/B Bonds will be issued in the manner, on the terms and with the security therefor described in the Limited Offering Memorandum. The exchange of any Outstanding Bonds tendered pursuant to the Exchange Offer is contingent on the issuance and sale of the Series 2024A-1/A-2 Bonds and Exchange Bonds by the Authority.  The Exchange Offer and the issuance and sale of the Series 2024A-1/A-2 Bonds by the Authority is collectively referred to herein as the "Refinancing Transaction."

As previously disclosed, on May 31, 2024, Tower Health entered into a transaction support agreement, with accompanying term sheet (together, as amended, modified or otherwise supplemented, the "Transaction Support Agreement"), among Tower Health, on behalf of itself and the other members of the Obligated Group, the master trustee under the Master Trust Indenture supporting the Outstanding Bonds and an ad hoc group (the "Ad Hoc Group") of holders of approximately 84% of the Outstanding Bonds.  The Transaction Support Agreement contemplates, among other things:

The Outstanding Bonds exchanged in the Exchange Offer will be retired or cancelled and will not be reissued.  Holders of Outstanding Bonds who do not participate in the Exchange Offer, as well as holders of Outstanding Bonds who tender Outstanding Bonds for exchange that Tower Health chooses not to accept, will continue to hold such Outstanding Bonds in their account unchanged by virtue of the Exchange Offer.

The Outstanding Bonds were issued, and the Series 2024A/B Bonds will be issued, for the benefit of Tower Health and certain of its affiliates that constitute the "Obligated Group."  The Obligated Group includes Tower Health, Reading Hospital, Brandywine Hospital, LLC, Chestnut Hill Hospital, LLC, Jennersville Hospital, LLC, Phoenixville Hospital, LLC and Pottstown Hospital, LLC.  Tower Health serves as the parent organization of the other Obligated Group members.  For certain information concerning the Obligated Group, see the Limited Offering Memorandum.

To make an informed decision as to whether, and how, to tender Outstanding Bonds for exchange pursuant to the Exchange Offer and deliver Consents pursuant to the Consent Solicitation, bondholders should read the Offer to Exchange and Consent Solicitation Statement, including the Limited Offering Memorandum, carefully and consult with their brokers, account executives, financial advisors, attorneys and/or other professionals.

The Offer to Exchange and Consent Solicitation Statement and Limited Offering Memorandum are available electronically on the website of the Information and Exchange Agent at www.globic.com/towerhealth, as well as the Municipal Securities Rulemaking Board through its Electronic Municipal Market Access ("EMMA") website, located at http://emma.msrb.org, using the CUSIP numbers for the Outstanding Bonds.  Upon expiration of the Exchange Offer, Tower Health will post notices regarding the results of the Exchange Offer on these same websites.

BofA Securities, Inc. is acting as Dealer Manager for the Exchange Offer. Investors with questions about the Exchange Offer and Consent Solicitation should contact the Dealer Manager at (646) 743-1362 or by email: dg.muni-lm@bofa.com. Investors and their brokers, account executives, financial advisors and/or other appropriate professionals with questions about the Exchange Offer may also contact the Information and Exchange Agent, Robert Stevens of Globic Advisors, at: (212) 227-9699 or by email: rstevens@globic.com.

Tower Health retains the right to cancel or modify the Exchange Offer at any time on or prior to the Expiration Date, as more fully described in the Offer to Exchange and Consent Solicitation Statement.

This announcement is for informational purposes only. This announcement is not an offer to sell or purchase or a solicitation of an offer to sell or purchase any Outstanding Bonds or Series 2024A/B Bonds. The Exchange Offer is not being made to, and Outstanding Bonds tendered in response to the Exchange Offer will not be accepted from or on behalf of, bondholders in any jurisdiction in which such offer or such acceptance thereof would not be in compliance with the laws of such jurisdiction. In any jurisdictions where the securities, "blue sky" or other laws require the Exchange Offer to be made through a licensed or registered broker or dealer, the Exchange Offer shall be deemed to be made on behalf of Tower Health through the Dealer Manager or one or more registered brokers or dealers licensed under the laws of that jurisdiction.

About Tower Health

Tower Health is a regional integrated healthcare system that offers compassionate, high-quality, leading-edge healthcare and wellness services to communities in Berks, Chester, Montgomery, and Philadelphia Counties. With over 10,000 team members and a combined 1,200 beds, Tower Health consists of Reading Hospital in West Reading; Phoenixville Hospital in Phoenixville; Pottstown Hospital in Pottstown; and St. Christopher's Hospital for Children in Philadelphia, in partnership with Drexel University. Tower Health is strongly committed to academic medicine and training, including multiple residency and fellowship programs, the Drexel University College of Medicine at Tower Health, and the Reading Hospital School of Health Sciences in West Reading. The system also includes Reading Hospital Rehabilitation at Wyomissing; home healthcare provided by Tower Health at Home; TowerDIRECT ambulance and emergency response; Tower Health Medical Group; Tower Health Providers, our clinically integrated network; and Tower Health Urgent Care facilities across our service area.

Cautionary Statement Regarding Forward-Looking Statements

This communication contains certain "forward-looking statements" within the meaning of the U.S. federal securities laws. These statements can be identified by the use of words or phrases such as "expects," "estimates," "projects," "budgets," forecasts," "anticipates," "intends," "plans," "may," "will," "could," "should," "believes," "predicts," "potential," "continue," and similar expressions. These statements are subject to significant known and unknown risks and uncertainties that could cause actual results to differ materially from those stated in, and implied by, this notice. These factors are outside of Tower Health's control and difficult to predict and manage. Factors that could cause actual results to vary materially from Tower Health's expectations include: (i) Tower Health's ability to succeed in the Refinancing Transaction; (ii) the failure of any conditions specified in the agreements among Tower Health and the Ad Hoc Group to be satisfied or waived; (iii) Tower Health's ability to effectively manage its operations during the significant cash flow and liquidity difficulties it is currently experiencing until such time as the Refinancing Transaction can be consummated; (iv) negative events or publicity associated with Tower Health's refinancing efforts; and (v) the negative consequences if Tower Health is unsuccessful in achieving the benefits of the Refinancing Transaction. All forward-looking statements speak only as of the date they are made and reflect Tower Health's good faith beliefs, assumptions and expectations, but they are not guarantees of future performance or events.  Furthermore, Tower Health disclaims any obligation to publicly update or revise any forward-looking statement, except as required by law.  By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements.  Tower Health files annual and quarterly reports and other financial information with EMMA.  You may access Tower Health's public filings on EMMA at emma.msrb.org.  Tower Health's website address is towerhealth.org.

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SOURCE Tower Health