Community Health buys 99.9% of 6½% notes, Triad's 7% notes due 2012, Triad's 7% notes due 2013

New York, July 31 - Community Health Systems, Inc. said it completed its tender offer for its $300 million of 6½% senior subordinated notes due 2012, buying $299.996 million or 99.9% of the notes, and its tender for Triad Hospitals Inc. $600 million of 7% senior notes due 2012 and $600 million of 7% senior subordinated notes due 2013, buying $599.92 million or 99.9% of the 2012 notes and $599.321 million or 99.9% of the 2013 notes.

At its previous announcement on July 16, Community Health said pricing in the tender for its notes 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 was 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.

Also on July 16, Triad announced pricing in the tender for its notes.

For the 2012 notes, Triad will pay $1,044.65 per $1,000 principal amount, which includes a consent payment of $30 per $1,000. For the 2013 notes, the company will pay $1,050.78 per $1,000 principal amount, which also includes a consent payment of $30 per $1,000.

Pricing assumes an early settlement date of July 25 and was fixed using a reference yield of 5.05%.

As of 5 p.m. ET on July 16, holders had tendered $599.3 million of the 2012 notes, or 99.9%, and $599.0 million of the 2013 notes, or 99.8%.

That was up from $587.3 million, or 97.9%, of the 2012 notes and $583.5 million, or 97.3%, of the 2013 notes at the last announcement at 5 p.m. ET on June 13.

At its last announcement on June 25, Triad extended the offer to midnight ET on July 30, prolonged from July 10 and June 27. It began on May 31.

The company previously said it received the necessary consents to amend the notes.

As previously announced, the company was 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.

For each $1,000 principal amount, the company determined 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 determined 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. Triad added that it will now determine pricing at 10 a.m. ET on July 16, lengthened from June 25 and June 13.

Those who tendered 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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