Encompass Health issues notice for partial redemption of its 4.500% senior notes due 2028

Rhea-AI Summary

Encompass Health (NYSE:EHC) has issued a notice to redeem $400 million of its 4.500% senior notes due 2028. The notes will be redeemed at 100% of par plus accrued interest, with payment expected on June 15, 2026.

The company expects to record an approximate $3.2 million loss on early extinguishment of debt in Q2 2026, leaving $400 million of these notes outstanding after redemption.

Positive

• Planned redemption of $400 million 4.500% senior notes due 2028
• Redemption at 100% of par plus accrued and unpaid interest
• Aggregate 2028 notes outstanding reduced from $800 million to $400 million

Negative

• Expected $3.2 million loss on early extinguishment of debt in Q2 2026

News Market Reaction – EHC

-0.62%

-0.62% Session close to close

In the May 15 session, EHC declined 0.62%, reflecting a mild negative market reaction.

Data tracked by StockTitan Argus on the day of publication.

Market Context

This announcement details a partial redemption of $400 million of Encompass Health’s 4.500% senior n...

Analysis

This announcement details a partial redemption of $400 million of Encompass Health’s 4.500% senior notes due 2028 at 100.0% of par, plus accrued interest, with payment expected on June 15, 2026. The company anticipates a $3.2 million loss on early extinguishment of debt in Q2 2026. In the context of recent earnings growth, dividend declarations, and ongoing hospital expansion, this move adds another element to the company’s capital allocation and balance sheet management story.

Key Figures

Redemption amount: $400 million Coupon rate: 4.500% Redemption price: 100.0% of par +5 more

8 metrics

Redemption amount $400 million Principal balance of 4.500% senior notes to be redeemed

Coupon rate 4.500% Interest rate on senior notes due 2028

Redemption price 100.0% of par Price at which 2028 Notes will be redeemed, plus accrued interest

Redemption date June 13, 2026 Contractual redemption date for 2028 Notes

Payment date June 15, 2026 Next business day when redemption price will be paid

Loss on extinguishment $3.2 million Expected loss on early extinguishment of debt in Q2 2026

Notes outstanding $800 million Aggregate principal amount of 2028 Notes outstanding as of May 14, 2026

Current share price $107.415 Pre-news price with 24h change of -0.55%

Historical Context

5 past events · Latest: May 11 (Positive)

Pattern 5 events

Date	Event	Sentiment	24h Move	Catalyst
May 11	New hospital plan	Positive	+3.1%	Announced plan to build a 50-bed inpatient rehab hospital in Idaho.
May 07	Dividend declaration	Positive	+2.0%	Declared quarterly cash dividend of $0.19 per share.
May 05	Hospital opening	Positive	-0.1%	Opened 50-bed rehab hospital in Concordville, Pennsylvania.
Apr 30	Quarterly earnings	Positive	+7.5%	Q1 2026 revenue, EBITDA, and EPS increased with raised full-year guidance.
Apr 23	Conference participation	Neutral	+0.1%	Announced participation in BofA Securities 2026 Health Care Conference.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Pattern Detected

Recent EHC news has often coincided with constructive market reactions, especially around earnings, dividends, and growth initiatives. The Q1 2026 earnings release with higher revenue and Adjusted EBITDA saw a notable positive move, and a subsequent dividend declaration and new hospital plans were also followed by gains. A hospital opening in Pennsylvania produced a slightly negative reaction despite operational expansion, while a conference participation notice had a minimal effect. Overall, investors have tended to respond favorably to growth and capital return updates.

Recent Company History

Over the past few weeks, EHC has reported several growth and capital-return milestones. On Apr 30, Q1 2026 results showed higher net operating revenue, Adjusted EBITDA, and EPS, with a 7.48% price gain. A quarterly dividend declaration on May 7 was followed by a 2.04% rise. New and planned rehabilitation hospitals in Pennsylvania and Idaho show continued expansion, with mixed but generally modest price reactions. Today’s debt redemption notice fits into an active capital allocation and growth phase for the company.

Key Terms

senior notes, principal balance, par, accrued and unpaid interest, +4 more

8 terms

senior notes financial

"partial redemption of its 4.500% senior notes due 2028"

Senior notes are a type of loan that a company borrows from investors, promising to pay it back with interest. They are called "senior" because in case the company faces financial trouble, these lenders are paid back before others. This makes senior notes safer for investors compared to other types of loans or bonds.

principal balance financial

"redemption of $400 million of the outstanding principal balance of its 4.500%"

Principal balance is the remaining amount of money still owed on a loan or debt instrument, not including interest or fees. For investors, it determines the size of upcoming cash flows, the amount that must be repaid if the borrower pays off the debt early, and the exposure to default—think of it as the unpaid 'purchase price' of a loan that drives interest income and repayment risk. Understanding principal balance helps investors value bonds, loans, and securitized assets and assess potential returns and losses.

par financial

"The redemption price will be 100.0% of par, plus accrued and unpaid interest"

"Par" is the value assigned to a bond or stock when it is first issued, often representing its face or original price. For bonds, it typically means $1,000, which is the amount the issuer promises to pay back at maturity. Knowing the par value helps investors understand if they are buying or selling at a premium (more than par) or a discount (less than par).

accrued and unpaid interest financial

"100.0% of par, plus accrued and unpaid interest to the redemption date"

Accrued and unpaid interest is the interest that has built up on a loan or debt but hasn't been paid yet. It's like owing your friend money for a favor over time—you're expected to pay it later, even though you haven't paid it yet. This matters because it shows how much you owe beyond the original amount borrowed.

early extinguishment of debt financial

"expects to record an approximate $3.2 million loss on early extinguishment of debt"

Early extinguishment of debt occurs when a borrower repays or cancels a loan before the scheduled end of the agreement. It’s like paying off a loan ahead of time, which can save money on interest but may also involve extra fees. For investors, it’s important because it can impact a company’s financial health and how much money is available for other priorities.

aggregate principal amount financial

"As of May 14, 2026, the aggregate principal amount of the 2028 Notes outstanding"

The aggregate principal amount is the total amount of money borrowed through a bond or loan that the borrower promises to repay. It’s like the original price tag on a loan or bond, showing how much money is involved in the deal. This number matters because it indicates the size of the debt and helps investors understand the scale of the borrowing.

trustee financial

"delivered to the registered holders of the 2028 Notes by Computershare Trust Company, National Association, the trustee"

A trustee is a person or institution legally appointed to hold and manage assets or enforce an agreement on behalf of other people (beneficiaries). Think of a trustee as a neutral referee or custodian who must act in the beneficiaries’ best interests, follow the trust or contract rules, and handle distributions, recordkeeping and enforcement. Investors care because a trustworthy trustee protects their rights, ensures promised payments or remedies are delivered, and can influence recoveries if things go wrong.

redemption price financial

"The redemption price will be 100.0% of par, plus accrued and unpaid interest"

The redemption price is the amount of money a person receives when they sell or redeem a bond or investment before it matures. It’s important because it determines how much you get back and can affect your overall profit or loss on the investment. Think of it like the price you get when returning a gift card early—it's the value you receive at that time.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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BIRMINGHAM, Ala., May 14, 2026 /PRNewswire/ -- Encompass Health Corp. (NYSE: EHC) today issued notice for redemption of $400 million of the outstanding principal balance of its 4.500% senior notes due 2028 (the "2028 Notes"). The redemption price will be 100.0% of par, plus accrued and unpaid interest to the redemption date of June 13, 2026, pursuant to the terms of the 2028 Notes. Since June 13, 2026 is not a business day, the redemption price will be paid on the next business day, June 15, 2026. As a result of this redemption, the Company expects to record an approximate $3.2 million loss on early extinguishment of debt in the second quarter of 2026. As of May 14, 2026, the aggregate principal amount of the 2028 Notes outstanding was $800 million.

The information contained in this press release does not constitute a notice of redemption of the 2028 Notes. Holders of the 2028 Notes should refer to the notice of redemption delivered to the registered holders of the 2028 Notes by Computershare Trust Company, National Association, the trustee with respect to the 2028 Notes.

About Encompass Health 
Encompass Health (NYSE: EHC) is the largest owner and operator of inpatient rehabilitation hospitals in the United States. With a national footprint that includes 175 hospitals in 39 states and Puerto Rico, the Company provides high-quality, compassionate rehabilitative care for patients recovering from a major injury or illness, using advanced technology and innovative treatments to maximize recovery. Encompass Health is recognized as America's Most Awarded Leader in Inpatient Rehabilitation by Newsweek and Statista and is ranked among Fortune's World's Most Admired Companies™, Forbes' America's Best Companies and Becker's Healthcare's Top Places to Work in Healthcare. For more information, visit encompasshealth.com, or follow us on our newsroom, X, Instagram and Facebook.

From Fortune.© 2026 Fortune Media IP Limited. All rights reserved. Fortune® is a registered trademark and Fortune World's Most Admired Companies™ is a trademark of Fortune Media IP Limited and are used under license. Fortune and Fortune Media IP Limited are not affiliated with, and do not endorse products or services of, Encompass Health.

Forward-looking statements
Statements contained in this press release which are not historical facts are forward-looking statements. In addition, Encompass Health, through its senior management, may from time to time make forward-looking public statements concerning the matters described herein. All such estimates, projections, and forward-looking information speak only as of the date hereof, and Encompass Health undertakes no duty to publicly update or revise such forward-looking information, whether as a result of new information, future events, or otherwise. Such forward-looking statements are necessarily estimates based upon current information and involve a number of risks and uncertainties. Actual events or results may differ materially from those anticipated in these forward-looking statements as a result of a variety of factors. While it is impossible to identify all such factors, factors which could cause actual events or results to differ materially from those estimated by Encompass Health include, but are not limited to, potential disruptions, breaches, or other incidents affecting the proper operation, availability, or security of Encompass Health's information systems, including unauthorized access to or theft of patient, business associate, or other sensitive information; changes, delays in (including in connection with resolution of Medicare payment reviews or appeals), or suspension of reimbursement for Encompass Health's services by governmental or private payors; a significant market disruption; and other factors which may be identified from time to time in Encompass Health's SEC filings and other public announcements, including its Form 10-K for the year ended Dec. 31, 2025 and Form 10-Q for the quarter ended March 31, 2026.

Media contact: 
Polly Manuel | 205-970-5912
Media@encompasshealth.com 

Investor relations contact:
Mark Miller | 205-970-5860
Mark.Miller@encompasshealth.com   

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SOURCE Encompass Health Corp.

FAQ

What debt redemption did Encompass Health (EHC) announce for its 4.500% senior notes due 2028?

Encompass Health plans to redeem $400 million of its 4.500% senior notes due 2028. According to Encompass Health, the redemption covers half of the $800 million outstanding principal, reducing remaining notes to $400 million following completion of the partial redemption.

At what price will Encompass Health (EHC) redeem its 4.500% senior notes due 2028?

The 2028 notes will be redeemed at 100% of par plus accrued and unpaid interest. According to Encompass Health, holders will receive this redemption price as of the June 13, 2026 redemption date, with payment processed on the next business day.

When will Encompass Health (EHC) pay the redemption price for its 2028 senior notes?

Encompass Health expects to pay the redemption price on June 15, 2026. According to Encompass Health, June 13, 2026 is the redemption date, but because it is not a business day, payment shifts to the next business day.

How much of Encompass Health’s 4.500% senior notes due 2028 will remain after the 2026 redemption?

After redeeming $400 million, $400 million of the 2028 notes will remain outstanding. According to Encompass Health, the aggregate principal was $800 million as of May 14, 2026, and the announced transaction retires half of that balance.

What accounting impact will Encompass Health (EHC) record from the early redemption of its 2028 notes?

The company expects to record an approximate $3.2 million loss on early extinguishment of debt. According to Encompass Health, this loss will be recognized in its second quarter 2026 results and is tied directly to the partial note redemption.

Does the Encompass Health (EHC) press notice serve as the official redemption notice for 2028 notes holders?

No, the information released does not constitute the formal notice of redemption. According to Encompass Health, holders should rely on the official notice delivered to registered holders by Computershare Trust Company, National Association, the trustee for the 2028 notes.