New Issue: Community Health $250 mln converts at 4.25% yield, up 25%

By Ronda Fears

Nashville, Tenn., Oct. 10 - Community Health Systems Inc. sold $250 million of seven-year convertible subordinated notes at par to yield 4.25% with a 25% initial conversion premium. Goldman Sachs was sole book-runner of the registered deal. The deal sold richer than price talk on the yield and at the aggressive end of premium guidance. Community Health Systems also sold 12 million shares of common stock at $26.80 each, fetching $321.6 million.

Price talk, which emerged on the deal before the Sept. 11 tragedy that struck New York and Washington, had put the yield between 4.5% and 5.0% and the initial conversion premium in a range of 21% to 25%. Brentwood, Tenn.-based Community Health, which operates general acute care hospitals, plans to use proceeds to repay a portion of its $500 million of 7.5% subordinated debt and a portion of its outstanding acquisition loan facility with Chase Manhattan Bank and other lenders.

Terms of the new deal are:

Issuer: Community Health Systems Inc.

Amount: $250 million

Book-runner: Goldman Sachs

Lead Managers: Credit Suisse First Boston and Merrill Lynch

Co-Managers: Banc of America Securities, JP Morgan Chase and UBS Warburg

Maturity Date: Oct. 15, 2008

Coupon: 4.25%

Issue Price: par

Yield: 4.25%

Conversion Premium: 25%

Conversion Price: $33.50

Conversion Ratio: 29.8507

Call: non-callable for four years with

make-whole provision for coupon payments with 150% trigger

Expected Ratings: Moody's: B3

S&P: B-

Settlement Date: Oct. 15

End

© 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.