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Tenet Healthcare obtains new $500 million loan
By Sara Rosenberg
New York, Jan. 10 - Tenet Healthcare Corp. reached an agreement with lenders on a new $500 million three-year senior term loan. Banc of America Securities LLC, Citigroup and SunTrust Bank are joint lead arrangers on the facility.
The loan is expected to have an interest rate of approximately Libor plus 200 basis points.
"We are very pleased with the responsiveness and show of support we have received from the joint lead arrangers on this facility and expect additional strong interest from the lending community," said Stephen D. Farber, chief financial officer, in a news release. "This refinancing will maintain Tenet's strong balance sheet with more than $1 billion of available liquidity."
The new facility will replace the company's existing $500 million 364-day revolver, which is undrawn and matures on Feb. 28. It is expected to include terms and conditions substantially similar to existing credit agreements, except for a change in the leverage covenant to a maximum of 2.5 times debt to EBITDA in the new facility from 3.5 times in the existing credit agreements.
Proceeds from the loan will be used to reduce borrowings under the existing $1.5 billion multi-year revolver due in 2006.
The loan is expected to close by late February.
Tenet Healthcare is a Santa Barbara, Calif. investor-owned healthcare services company.
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