Encompass Health Secures $500 Million with 5.875% Senior Notes Due 2034

Encompass Health Corp. (EHC) signed a Purchase Agreement on May 14, 2026 with a consortium of investors (see Schedule 1) to sell $500 million of its 5.875% senior notes due 2034. The notes will be issued under an Indenture dated May 29, 2026 with Computershare Trust Company, N.A. as trustee, and are guaranteed on an unsecured senior basis by the entities listed in Schedule 2.

The offering is being coordinated by Wells Fargo Securities, LLC, acting as the representative for the purchasers. The transaction package includes a Preliminary Offering Memorandum (May 14), a full Offering Memorandum, a Pricing Memorandum, and supplemental disclosures, all of which the company has represented as accurate as of the “Applicable Time” of 3:05 p.m. New York time on the signing day.

From a strategic standpoint, the $500 million infusion adds a substantial layer of senior unsecured debt to Encompass Health’s balance sheet, providing flexibility for general corporate purposes, debt refinancing, and potential capital investments in its post‑acute care network. The 5.875% coupon sits modestly above current market yields for comparable credit, reflecting the company’s solid credit profile and the backing of its guarantors.

Closing is contingent on customary conditions: satisfaction of all representations and warranties, delivery of the Indenture and guarantees, and any required regulatory approvals. The filing notes that all Exchange Act reports filed before the agreement are incorporated by reference, and no material adverse change has occurred.

The market reacted modestly. EHC shares were trading at $106.65, down 0.61%, tracking a broader S&P 500 decline of 1.23% on the day. Analysts noted that the note issuance does not dilute equity but does increase leverage, a trade‑off that appears acceptable given the company’s cash‑flow generation and the relatively low cost of capital.

Overall, the transaction underscores Encompass Health’s confidence in its growth trajectory and its ability to tap capital markets efficiently, while maintaining a disciplined capital structure.