Tenet sets talk for $4.6 billion two-part notes, to allocate Friday

By Paul A. Harris

Portland, Ore., Sept. 12 - Tenet Healthcare Corp. set price talk for its $4.6 billion two-part offering of non-callable high-yield notes, a syndicate source said on Thursday.

A $1.8 billion trance of seven-year senior secured notes (Ba3/B+/BB) is talked to yield 6% to 6¼%.

A $2.8 billion tranche of 8.5-year senior unsecured notes (B3/CCC+/B-) is talked to yield 8% to 8¼%.

Allocations are expected on Friday.

BofA Merrill Lynch is the left bookrunner. Barclays, Citigroup Global Markets Inc. and Wells Fargo Securities LLC are the joint bookrunners.

Scotia Capital, SunTrust Robinson Humphrey Inc. and Morgan Stanley & Co. LLC are the co-managers.

Both tranches of the Rule 144A with registration rights and Regulation S notes come with make-whole calls at Treasuries plus 50 basis points.

Proceeds will be used to help fund the acquisition of Vanguard Health and also to refinance some of Vanguard's existing debt.

The $1.8 billion tranche of secured notes represents a shift in the company's plans for financing the acquisition. Initially the secured debt was expected to come in the form of a bank loan.

The issuing entity will be THC Escrow Corp., which will be assumed by Tenet, 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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