Health Management wraps tender offer for 6 1/8%, 7 3/8% notes

By Toni Weeks

San Luis Obispo, Calif., Feb. 7 - Health Management Associates, Inc. completed the tender offers for its 6 1/8% senior notes due 2016 and 7 3/8% senior notes due 2020, according to a press release from parent company Community Health Systems, Inc.

The tender offers for the $400 million of 6 1/8% notes and $875 million 7 3/8% notes expired at 11:59 p.m. ET on Feb. 6.

As previously reported, the company took in tenders for $370,288,000, or about 92.6%, of its 6 1/8% notes and $854,088,000, or roughly 97.6%, of its outstanding 7 3/8% notes by 5 p.m. ET on Jan. 23, the consent expiration.

Following the early tenders, the company took in another $20,000 principal amount of the 6 1/8% notes, boosting the total amount tendered to $370,308,000, but no additional 7 3/8% notes by the expiration date.

The company had also solicited consents to eliminate substantially all of the covenants and default provisions. The requisite consents from the holders of both notes series were obtained, and the company executed a supplemental indenture for each series, as previously reported. The amendments became operative on Jan. 27, when payment for the tendered notes was made.

As noted before, the total purchase price per $1,000 principal amount was $1,118.13 for the 6 1/8% notes and $1,161.88 for the 7 3/8% notes. Those amounts included a consent payment of $30.00 per $1,000 principal amount of notes tendered by the consent date.

Those who tendered after the consent deadline received the total purchase price less the consent payment.

Holders also received accrued interest up to but excluding the applicable settlement date, which was Jan. 27 for the early tendered notes and Feb. 7 for notes tendered following the consent deadline but before the expiration date.

As previously reported, Health Management merged with Community Health Systems, Inc., who completed a $4 billion debt financing transaction, the proceeds of which were to fund the offers.

The issuer said on Jan. 24 that when the merger had been completed, it intended to call for redemption all notes that remained outstanding after the tender offers concluded.

The tender offers and consent solicitations were conditioned on the completion of the merger, the completion of the financing, availability of sufficient funds and the execution of supplemental indentures.

The tender and information agent was D.F. King & Co. Inc. (800 290-6427). BofA Merrill Lynch (888 292-0070 and 980 387-3907 collect) and Credit Suisse (800 820-1653 and 212 538-2147) were the dealer managers and solicitation agents for the tender offers and consent solicitations.

Health Management is a Naples, Fla.-based operator of acute care hospitals.

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