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HILLHAVEN ANNOUNCES COMPLETION OF MAJOR DEBT RESTRUCTURING, PREFERRED STOCK ISSUANCE AND ACQUISITION OF NURSING CENTERS:

 TACOMA, Wash., Sept. 7 /PRNewswire/ -- The Hillhaven Corp. (AMEX: HIL) announced today that it has completed a major debt restructuring and nursing center acquisition. The transaction has allowed Hillhaven to secure financing at lower interest rates, acquire nursing centers at a discount and obtain its financial independence from its former parent company, National Medical Enterprises Inc. (NME) (NYSE: NME).
 Hillhaven has entered into a $360 million commercial bank facility with a syndicate of 21 banks led by Morgan Guaranty Trust Co. of New York. The bank facility has a five year maturity.
 The company issued $120 million in Series D preferred stock to NME. The non-voting stock will initially accrue a cumulative, payable-in-kind dividend at 6.5 percent.
 Hillhaven completed its public offering of $175 million of 10-1/8 percent Senior Subordinated Notes due 2001. The underwriters for the offering were Merrill Lynch & Co., J.P. Morgan Securities Inc., The First Boston Corp. and Donaldson, Lufkin & Jenrette Securities Corp.
 The financing proceeds were used to (1) acquire 23 nursing centers previously leased from NME for $112 million, a $24 million discount from the established purchase option prices, (2) repay debt to NME of $92 million and (3) repay debt guaranteed by NME of $266 million. The new bank agreement will also allow Hillhaven to have NME released as guarantor on up to $130 million of other debt obligations. NME will continue to guarantee certain leases.
 Bruce L. Busby, Hillhaven's chief executive officer, said "The completion of these transactions is in accordance with previously announced plans to become financially independent of NME. We have repaid all debt owed to NME, significantly reduced the amount of debt guaranteed by NME and completed the acquisition of all 115 nursing centers originally leased from NME." Busby continued, "Our improving operating results have allowed us to recapitalize more than half a billion dollars of debt, and as a result, we are no longer dependent on NME's credit quality and guarantees."
 Busby added, "We have substantially improved our financial position and have increased stockholders' equity without dilution to the existing holders of our common stock."
 Hillhaven is one of the nation's largest diversified health care providers, operating over 400 nursing centers, retirement housing communities and pharmacy outlets in 36 states.
 -0- 9/7/93
 /CONTACT: Tim Carroll of The Hillhaven Corp., 206-572-4901/
 (HIL NME)


CO: The Hillhaven Corp. ST: Washington IN: HEA SU: RCN TNM

JH -- SE002 -- 9179 09/07/93 08:30 EDT
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Publication:PR Newswire
Date:Sep 7, 1993
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