Published on 5/2/2023 in the Prospect News High Yield Daily.
New Issue: Tenet Healthcare prices $1.35 billion eight-year secured notes at par to yield 6¾%
By Paul A. Harris
Portland, Ore., May 2 – Tenet Healthcare Corp. priced a $1.35 billion issue of eight-year senior secured first-lien notes (B1/BB-/BB-) at par to yield 6¾% in a Tuesday drive-by, according to market sources.
The yield printed at the wide end of the 6½% to 6¾% yield talk.
The notes played to demand amounting to twice the size of the deal, sources said.
A handful of real money accounts were believed to have taken down much of the issue, a trader said.
There was little if any trading activity in the new Tenet 6¾% notes due 2031 heading into the Tuesday close, said the trader, who marked them par ¼ bid, par ½ offered.
Barclays was the left bookrunner. Joint bookrunners were Goldman Sachs & Co. LLC, Citigroup Global Markets Inc., BofA Securities, Inc., Capital One Securities, Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, RBC Capital Markets, LLC, Truist Securities, Inc., Wells Fargo Securities, LLC, Fifth Third Securities, Inc., Santander US Capital Markets LLC, Scotia Capital (USA) Inc. and Morgan Stanley & Co. LLC.
The Dallas-based health care services provider plans to use the proceeds plus cash on hand to redeem all $756 million outstanding 4 5/8% senior secured first-lien notes due July 2024 and all $589 million outstanding 4 5/8% senior secured first-lien notes due September 2024.
| Issuer: | Tenet Healthcare Corp.
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| Amount: | $1.35 billion
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| Issue: | Senior secured first-lien notes
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| Maturity: | May 15, 2031
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| Left bookrunner: | Barclays
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| Joint bookrunners: | Goldman Sachs & Co. LLC, Citigroup Global Markets Inc., BofA Securities, Inc., Capital One Securities, Inc., Deutsche Bank Securities Inc., J.P. Morgan Securities LLC, RBC Capital Markets, LLC, Truist Securities, Inc., Wells Fargo Securities, LLC, Fifth Third Securities, Inc., Santander US Capital Markets LLC, Scotia Capital (USA) Inc. and Morgan Stanley & Co. LLC
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| Coupon: | 6¾%
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| Price: | Par
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| Yield: | 6¾%
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| Spread: | 336 bps
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| First call: | May 15, 2026 at 103.375
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| Trade date: | May 2
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| Settlement date: | May 16
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| Ratings: | Moody’s: B1
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| S&P: BB-
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| Fitch: BB-
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| Distribution: | Rule 144A and Regulation S for life
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| Price talk: | 6½% to 6¾%
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| Marketing: | Drive-by
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