Triad launches tender for 7% notes due 2012, 7% notes due 2013

By Jennifer Chiou

New York, May 31 - Triad Hospitals Inc. announced the start of a cash tender offer for any and all of its $600 million of 7% senior notes due 2012 and $600 million of 7% senior subordinated notes due 2013.

The company also is soliciting consents to certain proposed amendments to the note indentures to, among other things, eliminate substantially all of the restrictive covenants, eliminate or modify certain events of default and certain conditions to defeasance of the notes and eliminate or modify related provisions.

The offer is linked to and conditioned upon the completion of the company's merger with Community Health Systems, Inc. and FWCT-1 Acquisition Corp.

The offer ends at midnight ET on June 27.

For each $1,000 principal amount, the company will determine its payout for the 7% notes due 2012 using the present value, minus accrued interest, of $1,035, the redemption amount of the notes on their first call date of May 15, 2008, discounted using the yield on the 5.625% Treasury note due May 15, 2008 and a fixed spread of 50 basis points.

For each $1,000 principal amount, the company will determine its payout for the 7% notes due 2013 using the present value of $1,035, the redemption amount of the notes on their first call date of Nov. 15, 2008, discounted using the yield on the 4.375% Treasury note due Nov. 15, 2008 and a fixed spread of 50 bps.

The company said it will also pay accrued interest up to the payment date.

Those who tender by 5 p.m. ET on June 13 will receive a $30.00 consent payment, which is included in the payout.

The offer is also conditioned upon Community Health Systems having issued up to $3.365 billion of debt, Triad having sufficient available funds to pay for the offer and enough consents to amend the note indentures.

Credit Suisse (call collect 212 325-7596) and Wachovia Securities (866 309-6316 or call collect 704 715-8341) are the dealer managers. D.F. King & Co., Inc. is the information agent (800 967-7921 or call collect 212 269-5550).

Triad is a Plano, Texas, owner and manager of hospitals and ambulatory surgery centers.

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