Brookdale Announces Proposed Offering of $275 Million of Convertible Senior Notes Due 2018

NASHVILLE, Tenn., June 7, 2011 /PRNewswire/ -- Brookdale Senior Living Inc. (NYSE: BKD) ("the Company") announced today that it intends to commence an underwritten public offering, subject to market conditions and other factors, of $275 million aggregate principal amount of its Convertible Senior Notes due 2018 (the "Notes").  In addition, the Company intends to grant the underwriters a 13-day option to purchase up to an additional 15% of the Notes sold solely to cover over-allotments.  

The Notes will be convertible into cash, shares of the Company's common stock, par value $0.01 per share, or a combination of cash and shares, at the Company's option.  The interest rate, conversion rate and other terms of the Notes will be determined at the time of pricing of the offering.  The Notes will be the Company's senior unsecured obligations and will rank equally with all of its present and future senior unsecured debt and senior to any future subordinated debt.

The Company intends to use a portion of the net proceeds of the offering to pay the Company's cost of the convertible note hedge transactions described below, taking into account the proceeds to the Company of the warrant transactions described below, and to use the balance of the net proceeds of the offering (i) to repay, together with the proceeds from a proposed mortgage loan, a portion of the Company's outstanding mortgage indebtedness, (ii) to pay fees and expenses related to the offering of the Notes, and (iii) for general corporate purposes.

In connection with the offering of the Notes, the Company expects to enter into privately negotiated hedge transactions with counterparties that may include one or more of the underwriters (and/or their respective affiliates) (the "hedge counterparties").  The convertible note hedge transactions will cover, subject to customary anti-dilution adjustments, the number of shares of the Company's common stock that will initially underlie the Notes, and are intended to reduce the dilutive impact of the conversion feature of the notes on the Company's outstanding shares of common stock.  The Company also expects to enter into privately negotiated warrant transactions with the hedge counterparties initially relating to the same number of shares of the Company's common stock. The warrant transactions could have a dilutive effect to the extent that the market price per share of the Company's common stock exceeds the applicable strike price of the warrants on any expiration date of the warrants. In addition, if the underwriters exercise their option to purchase additional notes, we expect that the number of shares underlying the convertible note hedge transactions and warrant transactions will be increased to correspond to the number of shares underlying all Notes, including the additional notes.

The Company has filed a registration statement, including a prospectus, with the Securities and Exchange Commission ("SEC") for the offering to which this communication relates.  The Company plans to file a preliminary prospectus supplement with the SEC.  Before you invest, you should read the registration statement and preliminary prospectus supplement in that registration statement and other documents the Company has filed with the SEC for more complete information about the Company and this offering.

BofA Merrill Lynch, J.P. Morgan Securities LLC and RBC Capital Markets, LLC are acting as joint book running managers for the offering of the Notes.  To obtain a copy of the prospectus and the preliminary prospectus supplement for this offering, please contact BofA Merrill Lynch at 4 World Financial Center, New York, NY 10080, or by email at [email protected], J.P. Morgan Securities LLC c/o Broadridge Financial Solutions at 1155 Long Island Avenue, Edgewood, NY 11717, or RBC Capital Markets, LLC, Attn: Equity Syndicate at Three World Financial Center, 200 Vesey Street, 8th Floor, New York, NY 10281.  Alternatively, you may also obtain these documents for free by visiting the SEC website at www.sec.gov.

This press release does not constitute an offer to sell or the solicitation of an offer to buy securities.  Any offers of the securities will be made only by means of a prospectus and any prospectus supplements thereto.

About Brookdale Senior Living

Brookdale Senior Living Inc. is a leading owner and operator of senior living communities throughout the United States.  The Company is committed to providing an exceptional living experience through properties that are designed, purpose-built and operated to provide the highest-quality service, care and living accommodations for residents.  The Company owns and operates independent living, assisted living, and dementia-care communities and continuing care retirement centers, with 558 communities in 33 states and the ability to serve over 51,000 residents as of March 31, 2011.  

Safe Harbor

Certain items in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Those forward-looking statements are subject to various risks and uncertainties and include all statements that are not historical statements of fact and those regarding our intent, belief or expectations, including, but not limited to, all statements concerning the proposed mortgage loan and all statements concerning the proposed offering of convertible senior notes.  Words such as "expect(s)" and similar expressions are intended to identify such forward-looking statements.  These statements are based on management's current expectations and beliefs and are subject to a number of factors that could lead to actual results materially different from those described in the forward-looking statements.  We can give no assurance that our expectations will be attained. Factors that could cause actual results to differ materially from our expectations include, but are not limited to, the risk that we may not be able to satisfy the conditions and successfully complete the proposed mortgage loan or notes offering (or on the terms presently anticipated); and other risks detailed from time to time in our filings with the SEC, including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Such forward-looking statements speak only as of the date of this press release.  We expressly disclaim any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in our expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.

SOURCE Brookdale Senior Living Inc.