Community Health to launch $2.26 billion term loan D on Wednesday

By Sara Rosenberg

New York, Jan. 6 - Community Health Systems Inc. set a bank meeting for 11 a.m. ET in New York on Wednesday to launch a new $2.26 billion seven-year term loan D and an extension of up to 50% of its term loan C (around $1.7 billion) that will be fungible with the term loan D, according to a market source.

Credit Suisse Securities (USA) LLC and Bank of America Merrill Lynch are the joint physical bookrunners on the deal, and Citigroup Global Markets Inc., Goldman Sachs Bank USA, J.P. Morgan Securities LLC, RBC Capital Markets, SunTrust Robinson Humphrey Inc., UBS Securities LLC and Wells Fargo Securities LLC are bookrunners as well.

Co-managers on the deal include Bank of Tokyo Mitsubishi, Compass Bank, Credit Agricole, Deutsche Bank Securities Inc., Fifth Third Securities and Scotia Bank.

Covenants include maximum leverage and minimum interest coverage ratios, and maximum capital expenditures.

Commitments are due on Jan. 17, the source added.

Proceeds from the new term loan D will be used to help fund the acquisition of Health Management Associates Inc. for $13.78 per share, consisting of $10.50 per share in cash plus 0.06942 of a share of Community Health common stock for each Health Management share.

The transaction is valued at about $7.6 billion, including the assumption of around $3.7 billion of debt.

In the summer, the company had said that it received a commitment for $2.26 billion in senior secured term loans and $4.58 billion in bridge loans to fund the acquisition.

The bridge loans were said to be split between a $2,375,000,000 unsecured tranche and a $2,205,000,000 secured tranche and would be reduced by any cash proceeds from notes issued.

Closing is anticipated by the end of this quarter, subject to approval by a 70% vote of Health Management's stockholders, antitrust clearance, receipt of other regulatory approvals, the absence of certain adverse developments, and customary conditions. The transaction is not subject to financing.

Community Health is a Nashville, Tenn.-based hospital company. Health Management is a Naples, Fla.-based owner and manager of hospitals and ambulatory surgery centers.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.