Published on 7/29/2009 in the Prospect News High Yield Daily.
New Issue: HCA upsizes to $1.25 billion, prices 7 7/8% notes due 2020 at 98.254 to yield 8 1/8%
By Paul A. Harris
St. Louis, July 29 - HCA Inc. returned to the high-yield market on Wednesday with a massively upsized $1.25 billion issue of 7 7/8% senior secured first-lien notes due Feb. 15, 2020 (Ba3/BB).
The notes priced at 98.254 to yield 8 1/8%, in the middle of the 8% to 8¼% yield talk, and rich to the discount talk of approximately 2 points. It was increased from $750 million.
J.P. Morgan, Bank of America Merrill Lynch, Citigroup, Goldman Sachs & Co. and Wells Fargo Securities were joint bookrunners.
Proceeds will be used to repay bank debt.
Wednesday's deal from the Nashville-based hospital company came 3½ months after it priced another massively upsized $1.5 billion issue of 8½% 10-year first-lien senior secured notes at a significantly deeper discount, 96.755, to yield 9%, on April 15.
| Issuer: | HCA Inc.
|
| Face amount: | $1.25 billion (increased from $750 million)
|
| Proceeds: | $1.228 billion
|
| Maturity: | Feb. 15, 2020
|
| Security description: | Senior secured first-lien notes
|
| Bookrunners: | J.P. Morgan, Banc of America Securities LLC/Merrill Lynch & Co., Citigroup, Goldman Sachs & Co., Wells Fargo Securities
|
| Co-managers: | Deutsche Bank Securities
|
| Coupon: | 7 7/8%
|
| Price: | 98.254
|
| Yield: | 8 1/8%
|
| Spread: | 446 bps
|
| Call features: | Make-whole provision at Treasuries plus 50 bps until Aug. 15, 2014, then callable at 103.938, 102.625, 101.313, declining to par on and after Aug. 15, 2017
|
| Equity clawback: | 35% at 107.875 until Aug. 15, 2012
|
| Change of control: | 101 put
|
| Trade date: | July 29
|
| Settlement date: | Aug. 11
|
| Ratings: | Moody's: Ba3
|
| Standard & Poor's: /BB
|
| Distribution: | Rule 144A/Regulation S with registration rights
|
| Price talk: | 8% to 8¼% with approximately 2 points of OID
|
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