Tenet Healthcare shops $500 million five-year second-lien notes; initial guidance 8¼%-8½%

By Paul A. Harris

Portland, Ore., Nov. 16 – Tenet Healthcare Corp. announced on Wednesday that it plans to sell $500 million of senior secured second-lien notes due Jan. 1, 2022, according to market sources.

The five-year notes were scheduled to be marketed by means of a mid-morning investor conference call on Wednesday.

The deal is expected to price later Wednesday or on Thursday.

Initial guidance has the notes coming to yield 8¼% to 8½%, a trader said.

Barclays is the lead left bookrunner. BofA Merrill Lynch and Citigroup Global Markets Inc. are the joint bookrunners.

The deal is in the market with Rule 144A and Regulation S formats. Under certain circumstances, Tenet and the guarantors will be required to enter into a registration rights agreement.

The notes become callable after two years at par plus 50% of the coupon and feature a 101% poison put.

The covenants are similar to those of Tenet's senior secured floating-rate notes due 2020.

The Dallas-based hospital chain plans to use the proceeds to repay ABL revolver borrowings and for general corporate purposes.

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