Add to balance / Manage account | User: | Log out |
Prospect News home > News index > List of issuers H > Headlines for HCA Inc. > News item |
HCA elects PIK option for May 2009 coupon payment on second-lien notes
By Paul A. Harris
St. Louis, Nov. 6 - HCA Inc. disclosed its intention to make the May 15, 2009 coupon payment on its 9 5/8% senior secured payment-in-kind toggle notes due 2016 in-kind, rather than in cash.
The toggle feature increases the coupon by 75 basis points to 10 3/8%.
"While the company has sufficient liquidity to meet its anticipated needs without use of this PIK feature, [it] is electing to pay PIK interest ... as a prudent method to enhance liquidity in light of the dislocation in the current financial markets and the uncertainty as to when reasonable conditions will return," HCA stated in the 8-K document that it filed on Thursday with the Securities and Exchange Commission.
HCA, issuing via Hercules Holding II, the equity consortium that acquired the Nashville, Tenn.-based health care services company, priced $1.5 billion of the 9 5/8% senior secured PIK toggle notes at par on Nov. 6, 2006 as part of a $5.7 billion three-tranche junk bond deal.
In the present market the 75 bps PIK toggle option amounts to a cheap source of cash for HCA, market sources commented on Thursday.
Of 47 outstanding PIK toggle notes now in the market, coupon payments on 14 have recently been done as PIK payments, as opposed to cash payments, an investment banker said.
© 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.