EX-1 2 0002.txt Exhibit (a)(18) CII FINANCIAL, INC. California Indemnity Insurance Company Commercial Casualty Insurance Company subsidiaries of Sierra Health Services, Inc. P O. Box 15645, Las Vegas, Nevada 89114-5645 PRESS RELEASE FOR IMMEDIATE RELEASE CONTACTS: John Okita Andrew C. Karp Chief Financial Officer Managing Director (702) 242-7531 Banc of America Securities LLC High Yield Special Products (704) 388-4813 or (888) 292-0070 CII FINANCIAL ANNOUNCES REVISED TERMS OF EXCHANGE OFFER FOR CONVERTIBLE SUBORDINATED DEBENTURES AND EXTENSION OF EXPIRATION DATE Las Vegas, April 2, 2001 - CII Financial, Inc. today announced the amendment of its pending exchange offer for all $47 million of its outstanding 7 1/2% convertible subordinated debentures due September 15, 2001 (CUSIP No. 12551LAB7). Under the offer, holders can choose to exchange their old 7 1/2% junior subordinated debentures for either new senior debentures or cash. The Company said the revised terms of the offer consist of the following: - The cash purchase price has been increased from $525 per $1,000 principal amount to $700 per $1,000 principal amount, plus accrued interest. - The funds available to finance the offer have been increased from $10,237,500 to $20,000,400. As a result, the Company is now offering to buy a total of $28,572,000 principal amount of old 7 1/2% subordinated debentures, or 60.7%, for cash. - The Company is offering to exchange the remaining $18,487,000 principal amount of old 7 1/2% subordinated debentures for new senior debentures. ---more--- CII Announces Revised Terms p. 2/2/2/2/2 - The interest rate on the new senior debentures has been increased from 9% to 9 1/2%. In addition, the maturity of the new senior debentures has been shortened from September 15, 2006 to March 31, 2005. - The new 9 1/2% senior debentures will be senior indebtedness of CII Financial and will rank senior to all other indebtedness, including any remaining old 7 1/2% subordinated debentures. The new 9 1/2% senior debentures will also rank senior to CII Financial's guaranty of the $135 million credit facility of the Company's parent, Sierra Health Services, Inc., subject to majority approval by the bank group. - In the event of a change of control of CII Financial, holders of the new 9 1/2% senior debentures will have the right to require the Company to repurchase their new debentures at 100% of the principal amount, plus a specified premium declining over time. The repurchase premium will initially be 5%. Under the amended offer, holders who elect cash will receive $700 in cash for each $1,000 principal amount of their old 7 1/2% subordinated debentures accepted under the cash option, plus accrued and unpaid interest in cash. If holders of more than $28.6 million total principal amount of old 7 1/2% subordinated debentures elect to sell their debentures for cash, the Company will purchase a total of $28.6 million principal amount of old 7 1/2% subordinated debentures for cash and the Company will exchange the balance of the tendered debentures for new 9 1/2% senior debentures. All holders who elect to receive cash will be treated equally in this process. It is a condition of the offer, as amended, that at least $28.6 million total principal amount of old 7 1/2% subordinated debentures be tendered for cash. As a result of the revisions, holders who elect new 9 1/2% senior debentures will receive $1,000 principal amount of new 9 1/2% senior debentures for each $1,000 principal amount of their old 7 1/2% subordinated debentures, plus accrued and unpaid interest in cash. It is a condition of the offer, as amended, that the Company will exchange no more than $18.5 million total principal amount of old 7 1/2% subordinated debentures for new 9 1/2% senior debentures. The expiration date for the exchange offer has been extended from 5:00 p.m., New York City time, on April 2, 2001, to 11:59 p.m., New York City time, on April 12, 2001. The Company filed an amended Registration Statement with the Securities and Exchange Commission on March 30, 2001. The Company said that, prior to revising the terms of the offer, it had received tenders from holders of $14,776,000 in aggregate principal amount of debentures as of 5:00 p.m., New York City time, on March 30, 2001. ---more--- CII Announces Revised Terms p. 3/3/3/3/3 The complete terms of the offer, as amended, are contained in the amended Preliminary Prospectus and Exchange Offer dated March 30, 2001. Banc of America Securities LLC is the exclusive dealer manager for the offer. D.F. King & Co., Inc. is the information agent and Wells Fargo Corporate Trust is the depositary. Copies of the Preliminary Prospectus and Exchange Offer may be obtained by calling D.F. King at (800) 735-3591. Additional information concerning the terms and conditions of the offer may be obtained by contacting Banc of America Securities LLC at (888) 292-0070. CII Financial is a holding company primarily engaged in writing workers' compensation insurance in nine western and mid-western states through its wholly owned subsidiaries, California Indemnity Insurance Company, Commercial Casualty Insurance Company, Sierra Insurance Company of Texas and CII Insurance Company. CII Financial is a wholly owned subsidiary of Sierra Health Services, Inc. (NYSE:SIE), a diversified health care services company based in Las Vegas. Statements in this news release that are not historical facts are forward-looking and based on management's projections, assumptions and estimates; actual results may vary materially. Forward-looking statements are subject to certain risks and uncertainties, some of which may be found in the Preliminary Prospectus and Exchange Offer and other documents filed with the Securities and Exchange Commission and which are incorporated herein by reference. Additional Information and Where to Find It: CII Financial, Inc. has filed a Registration Statement with the Securities and Exchange Commission on Form S-4 registering the new debentures to be issued in the exchange offer. The Registration Statement and the preliminary prospectus contained therein contain important information about CII Financial, the exchange offer and related matters. Security holders are urged to read the Registration Statement and the preliminary prospectus contained therein, CII Financial's Schedule TO and any other relevant documents filed by CII Financial with the SEC. The Registration Statement has not yet become effective. The new debentures may not be sold and, although you may tender your old debentures, tenders may not be accepted prior to the time the Registration Statement becomes effective. This shall not constitute an offer to sell or an offer to buy nor shall there be any sale of the new debentures in any State in which such offer, solicitation or sale would be unlawful. Security holders are able to obtain copies of the Registration Statement on Form S-4 and the preliminary prospectus, CII Financial's Schedule TO and any other relevant documents for free through the Web site maintained by the SEC at http://www.sec.gov. In addition, these documents are available free of charge by contacting the Information Agent for the offer, D.F. King & Co., at (800) 735-3591. If you have any questions about the offer, please call the Dealer Manager for the offer, Banc of America Securities LLC, at (888) 292-0070. # # #