CHS/Community Health driving by with $1.54 billion notes due 2030; initial talk mid-5% area

By Paul A. Harris

Portland, Ore., Jan. 20 – CHS/Community Health Systems, Inc. plans to price $1.535 billion of senior secured notes due May 2030 (expected ratings B2/B) in a Thursday drive-by trailing a conference call with investors, according to market sources.

Initial guidance has the deal coming to yield in the mid-5% area, a trader said.

Citigroup Global Markets Inc. is the left lead bookrunner. Credit Suisse Securities (USA) LLC and J.P. Morgan Securities LLC are the joint lead bookrunners.

RBC Capital Markets LLC, Wells Fargo Securities LLC, Capital One Securities Inc., BofA Securities Inc. and Goldman Sachs & Co. LLC are the joint bookrunners.

The Rule 144A and Regulation S for life notes become callable in May 2025 at par plus 50% of the coupon. A special call provision allows the issuer to redeem 10% of the notes annually at 103 during the non-call period.

The notes also feature a three-year 40% equity clawback at par plus the coupon and have a 101% poison put.

The Franklin, Tenn.-based provider of health care and hospital services plans to use the proceeds plus cash from the balance sheet to redeem its 6 5/8% senior secured notes due 2025.

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