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Tenet Healthcare gets tenders for $1.4 billion of notes in exchange for 6 3/8%, 6½% notes
By Jennifer Chiou
New York, Feb. 27 - Tenet Healthcare Corp. said it obtained tenders for a total of $1.4 billion of notes in its offer to exchange up to $1.6 billion of its outstanding 6 3/8% global senior notes due Dec. 1, 2011 and 6½% notes due June 1, 2012 for an equal amount of two new series of senior secured notes maturing in 2014 and 2019.
Exchanged notes include $915 million, or 91.5%, of the 6 3/8% notes and $484 million, or 80.7%, of the 6½% notes.
The company will issue $1.4 billion of new notes, consisting of about $700 million of 9% six-year notes and $700 million of 10% nine-year notes.
The early participation date and withdrawal deadline were 5 p.m. ET on Feb. 26, extended from 5 p.m. ET on Feb. 4.
The expiration date was 5 p.m. ET on Feb. 26.
As announced on Jan. 22, Citigroup, Banc of America Securities, Goldman Sachs and Scotia Capital led the exchange.
The new notes are effectively senior to any remaining notes, including the $2.5 billion of the remaining 2013 through 2031 notes, by virtue of a guarantee and pledge of certain stock in subsidiaries, according to market sources.
Total consideration per $1,000 was expected to include $500 of the 9% notes, $500 of the 10% notes and a $20 early payment concession.
Minimum participation required $300 million of new notes. As originally announced, the early participation date was 5 p.m. ET on Feb. 4.
As already reported, Franklin Templeton owns over 60% of the 2011 paper and 50% of the 2012 paper, according to a high-yield mutual fund manager.
The source said that the dealers were stressing that the exchange is being done on a par-for-par basis, i.e. "No Haircut."
The new notes are guaranteed and secured by a pledge of the capital stock and other ownership interests of some Tenet subsidiaries, according to a company news release.
Dallas-based Tenet Healthcare owns and operates acute-care hospitals and provides related health-care services.
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