By Paul A. Harris
Portland, Ore., Sept. 13 - Tenet Healthcare Corp. priced $4.6 billion of non-callable high-yield notes in two tranches on Friday, according to a syndicate source.
A $1.8 billion tranche of seven-year senior secured notes (Ba3/B+/BB) priced at par to yield 6%, at the tight end of the 6% to 6¼% yield talk.
A $2.8 billion tranche of 8.5-year senior unsecured notes (B3/CCC+/B-) priced at par to yield 8 1/8%, in the middle of the 8% to 8¼% yield talk.
BofA Merrill Lynch was the left bookrunner. Barclays, Citigroup Global Markets Inc. and Wells Fargo Securities LLC were the joint bookrunners.
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.
| Issuer: | THC Escrow Corp. (Tenet Healthcare Corp.)
|
| Amount: | $4.6 billion
|
| Bookrunners: | BofA Merrill Lynch, Barclays, Citigroup Global Markets Inc., Wells Fargo Securities LLC, Scotia Capital (USA) Inc., SunTrust Robinson Humphrey Inc., Morgan Stanley & Co. LLC
|
| Trade date: | Sept. 13
|
| Settlement date: | Sept. 27
|
| Distribution: | Rule 144A with registration rights and Regulation S
|
| Marketing: | Roadshow
|
|
|
| Senior secured notes
|
| Amount: | $1.8 billion
|
| Maturity: | Oct. 1, 2020
|
| Coupon: | 6%
|
| Price: | Par
|
| Yield: | 6%
|
| Spread: | 367 bps
|
| Call protection: | Non-callable
|
| Make-whole: | Treasuries plus 50 bps
|
| Ratings: | Moody's: Ba3
|
| Standard & Poor's: B+
|
| Fitch BB
|
| Price talk: | 6% to 6¼%
|
|
|
| Senior unsecured notes
|
| Amount: | $2.8 billion
|
| Maturity: | April 1, 2022
|
| Coupon: | 8 1/8%
|
| Price: | Par
|
| Yield: | 8 1/8%
|
| Spread: | 543 bps
|
| Call protection: | Non-callable
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: CCC+
|
| Fitch: B-
|
| Price talk: | 8% to 8¼%
|
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