EM-focused Auna starts exchange offer, consent bid for 6˝% notes due 2025

By Marisa Wong

Los Angeles, Nov. 13 – Auna SA has begun an offer to exchange any and all of its $300 million outstanding 6˝% senior notes due 2025 (Cusip: 05151VAA5, P0592VAA6) for newly issued 10% senior secured notes due 2029, according to a press release.

The company is offering a total consideration of $1,040 per $1,000 principal amount. The total consideration includes an early participation premium of $40 per $1,000 of notes tendered for exchange by the early participation deadline.

Holders tendering after the early deadline will only be eligible to receive the exchange consideration of $1,000 per $1,000 principal amount.

The exchange consideration will be payable in principal amount of new notes.

The company will also pay accrued interest in cash.

The new Rule 144A and Regulation S notes will be fully and unconditionally guaranteed on a senior secured basis by some of the company’s subsidiaries.

The company said it will not receive any cash proceeds from the issuance of the new notes in the exchange offer. Existing notes surrendered and accepted for exchange will be canceled.

Consent bid

In connection with the exchange offer, the company is also soliciting consents from holders of the existing notes for the adoption of some amendments to the indenture governing the existing notes.

The proposed amendments would eliminate substantially all of the covenants as well as some events of default and related provisions contained in the indenture and release any collateral, encumbrances, liens, pledges or other security interest granted by the company and its subsidiaries to secure the existing notes.

The proposed amendments require the consents of holders of a majority in aggregate principal amount of the existing notes outstanding, excluding any existing notes held by the company or its affiliates.

If a holder exchanges notes in the exchange offer, that holder will be deemed to deliver its consent, with respect to the principal amount of such exchanged notes, to the proposed amendments.

Conditions

Each of the exchange offer and the solicitation may be individually amended, extended, terminated or withdrawn without amending, extending, terminating or withdrawing the other, provided that the minimum exchange condition and financing condition are satisfied.

The exchange offer and consent solicitation are conditioned on, among other things, the receipt of consents from holders of not less than 80% in aggregate principal amount of the existing notes outstanding and on the successful closing of a new term loan.

The company said it may, at its discretion, waive the minimum exchange condition or financing condition or any other condition.

Concurrently with the launch of the exchange offer, the company is entering into a new term loan maturing in 2028. The company expects to borrow up to an estimated $550 million on the settlement date of the exchange offer, with the net proceeds to be used to repay the company’s senior secured notes due 2028. The collateral securing the new notes will also secure obligations under the new term loan on a pari passu basis with the liens securing the new notes.

Timeline

The early participation deadline is at 5 p.m. ET on Nov. 28, which is also the withdrawal deadline.

The offer expires at 5 p.m. ET on Dec. 12.

Settlement is slated for Dec. 15.

At any time after the withdrawal deadline and before the expiration deadline, if the minimum exchange condition has been satisfied or waived, and the company has received the required consents, on that date the company, each of the guarantors of the existing notes and the notes trustee may execute a fourth supplemental indenture giving effect to the proposed changes. The supplemental indenture will be effective upon execution but will only become operative once the exchange offer settles.

The dealer managers and solicitation agents for the exchange offer and consent solicitation are Citigroup Global Markets Inc. (212 723-6106 or 800 558-3745), HSBC Securities (USA) Inc. (888 HSBC-4LM or 212 525-5552), Santander US Capital Markets LLC (855 404-3636 or 212 940-1442) or Banco BTG Pactual SA – Cayman Branch (212 293-4600).

The exchange and information agent is Global Bondholder Services Corp. (212 430-3774 for banks and brokers; 855 654-2014; https://gbsc-usa.com/eligibility/auna; contact@gbsc-usa.com).

Auna is a Luxembourg-based Latin America-focused health care company with a network of facilities in Mexico, Colombia and Peru.

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