Community Health eyes $500 million add-on to 8% exchange notes

By Wendy Van Sickle

Columbus, Ohio, Oct. 29 – Community Health Systems, Inc. subsidiary CHS/Community Health Systems, Inc. plans to issue $500 million of new 8% senior secured notes due 2027 as a tack-on to $700 million of the notes it is planning to issue to settle an exchange offer, according to a news release.

Proceeds of the tack-on offering would be used to redeem all $121 million of its outstanding 7 1/8% senior notes due 2020 at par plus accrued interest to, but excluding, the redemption date; to repay and terminate its cash-flow based revolver; and to repay borrowings outstanding under its ABL facility.

It is expected that the new secured notes will have a make-whole call until Dec. 15, 2022, when they will become redeemable at par plus 50% of the coupon, with the redemption premium stepping down to par on and after Dec. 15, 2024.

The company announced the issuer is planning to offer $700 million of the new notes to settle an exchange offer for any and all of its $2,632,000,000 of existing 6 7/8% senior notes due 2022. The issuer would also issue up to $1,932,000,000 of 6 7/8% senior notes due 2028 to settle the exchange.

Community Health is a Franklin, Tenn., hospital company.

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