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Tenet to price $3.78 billion three-part secured and unsecured notes in Monday drive-by
By Paul A. Harris
Portland, Ore., June 5 – Tenet Healthcare Corp. plans to sell $3.78 billion of notes in three tranches on Monday trailing a late-morning global investor conference call, according to a market source.
The deal includes $1.87 billion of secured first-lien notes due July 15, 2024. The issuing entities for $830 million of that amount will be Tenet Healthcare. The remaining $1.04 billion of secured first-lien notes will be issued by THC Escrow Corp. and THC Escrow Corp. III, a Delaware corporation established to issue the THC Escrow Corp. notes.
THC Escrow Corp. will also sell $1.41 billion of secured second-lien notes due May 1, 2025 and $500 million of senior unsecured notes due Aug. 1, 2025.
Barclays is the lead left bookrunner. BofA Merrill Lynch, Goldman Sachs & Co., Capital One, Citigroup Global Markets Inc., RBC Capital Markets LLC, SunTrust Robinson Humphrey Inc., Wells Fargo Securities LLC, Morgan Stanley & Co. LLC and Scotia Capital are the joint bookrunners.
The notes come in the Rule 144A and Regulation S formats. Under certain circumstances Tenet and the guarantors of the notes will be required to enter into a registration rights agreement.
The notes in all three tranches become callable after three years at par plus 50% of the coupons and may be put by investors at 101% upon a change of control.
The Dallas-based owner and operator of hospitals and health care facilities plans to use the proceeds to redeem $1,041,000,000 of its 6¼% secured first-lien notes due 2018, $900 million secured first-lien floating-rate notes due 2020, $1.1 billion 5% senior unsecured notes due 2019 and $500 million 8% senior unsecured notes due 2020.
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