Community Health sets pricing in tender for 6½% notes

New York, July 16 - Community Health Systems, Inc. set pricing in its tender offer for its $300 million of 6½% senior subordinated notes due 2012.

The payment will be $1,043.28 per $1,000 principal amount of notes for those tendered by the consent deadline, assuming an early settlement date of July 25.

The reference yield for the calculation was 4.999%.

Included in the total is the consent payment of $30.00 per $1,00 principal amount.

As of 5 p.m. ET on July 16, holders had tendered $299.9 million of the notes, or 99.99%, the same as at 7 a.m. ET on June 25, the last announcement.

Community Health previously extended the tender on June 25, setting a new date of midnight ET on July 30 instead of July 10. The tender offer was originally set to expire June 27.

The pricing date was reset to 10 a.m. ET July 16 from June 25.

As previously announced, in addition to the tender, the company is soliciting consents to amend the notes to eliminate substantially all of the restrictive covenants and eliminate or modify some events of default, some conditions to defeasance of the notes and related conditions. The proposed amendments require consent from holders of a majority of the notes.

For each $1,000 principal amount of notes tendered by the consent deadline, the payout is equal to the present value, minus accrued interest, of $1,032.50 plus the remaining scheduled interest payments to Dec. 15, 2008. The payout is based on a yield to the redemption date equal to 50 basis points over the yield of the 3 3/8% U.S. Treasury due Dec. 15, 2008.

Notes tendered after the consent deadline will receive the same amount, less a consent payment of $30.00 per $1,000 principal amount.

Holders may not tender notes without soliciting consents.

Settlement of the offer depends on conditions including the completion of the company's merger with Triad Hospitals, Inc. and FWCT-1 Acquisition Corp., the availability of sufficient funds and the receipt of consents from holders of a majority of the notes.

Credit Suisse (212 325-7596) and Wachovia Securities (866 309-6316 or collect 704 715-8341) are the dealer managers. D.F. King & Co., Inc. (800 769-7666 or collect 212 269-5550) is the information agent.

Community Health is a hospital chain operator based in Franklin, Tenn.

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