Tenet Healthcare plans to refinance $4.2 billion of notes via new offerings, revolver

By Rebecca Melvin

New York, Aug. 12 – Tenet Healthcare Corp. plans to refinance $4.2 billion of senior secured notes in four series with the proceeds from two new issues of senior secured first-lien notes.

The company will use net proceeds of the sale of the notes, after paying fees and expenses, together with cash on hand under its senior secured revolving credit facility to fund the redemption and discharge of the four existing notes, which include:

• $500 million principal amount of its outstanding 4¾% senior secured notes due 2020;

• $1.8 billion principal amount of its outstanding 6% senior secured notes due 2020;

• $850 million principal amount of its outstanding 4½% senior secured notes due 2021; and

• $1.05 billion outstanding principal amount of its 4 3/8% senior secured notes due 2021.

The new notes will be in approximately the same amount in two tranches due 2026 and 2027.

The new Rule 144A or Regulation S notes will be guaranteed by certain of Tenet’s subsidiaries and secured on a first-lien priority basis by a pledge of the capital stock and other ownership interests of certain of Tenet’s subsidiaries. The new paper will be effectively senior to Tenet’s existing and future junior debt, as well as unsecured debt and other liabilities, to the extent of the value of the collateral securing such borrowings.

Tenet is a Dallas-based health care services company.

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