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Health care facility operator Sun Healthcare Group Inc. said Monday that subsidiaries of Sabra Health Care REIT Inc. agreed to sell $225 million in senior notes in a private placement to institutional investors.

The subsidiaries are selling 8.125 percent senior notes due 2018. The sale of the notes is expected to close on Oct. 27.

Sun Healthcare is separating into two separate companies. Sabra Health Care will own all of the company's real estate assets, while Sun Healthcare will own all the operating subsidiaries.

The net proceeds from the offering will be placed in escrow pending the satisfaction or waiver of certain conditions, including certain conditions to the restructuring, Sun Healthcare said. Upon the satisfaction or waiver of the conditions, the proceeds from the offering will be used, together with cash from Sun, to redeem Sun's existing 9.125 percent senior subordinated notes due 2015, including accrued interest and the redemption premium.

On Oct. 15, Sun Healthcare said it would spin off Sabra and offer $225 million in senior notes due 2018 in a private offering.

Shares of Sun Healthcare rose 16 cents to $9.04 in morning trading.

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