Tenet to offer $1.8 billion secured, $2.8 billion unsecured notes

By Paul A. Harris

Portland, Ore., Sept. 6 - Tenet Healthcare Corp. announced in a Friday press release that it plans to sell $1.8 billion of secured notes and $2.8 billion of unsecured notes.

The $1.8 billion of secured debt had previously been expected to materialize in the form of a bank loan.

The Rule 144A and Regulation S bond deal will be led by BofA Merrill Lynch and is expected to be launched during the week ahead, market sources say.

Proceeds will be used to help fund the acquisition of Vanguard Health, expected to close before the end of 2013, and also to refinance some of Vanguard's debt.

Under the agreement, Tenet is buying Vanguard for $21 per share in an all-cash transaction. The acquisition is valued at $4.3 billion, including the assumption of $2.5 billion in Vanguard debt.

Closing is expected before year-end, subject to customary conditions and regulatory approvals.

Tenet is a Dallas-based health care services company. Vanguard is a Nashville, Tenn.-based owner and operator of acute care and specialty hospitals and complementary facilities.

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