Triad Hospitals bringing at least $450 million notes to fund tender; seeks to improve rates, covenants

By Paul A. Harris

St. Louis, Oct. 27 - Triad Hospitals, Inc. announced in a Monday press release that it intends to bring an offer of $450 million of senior subordinated notes to fund the tender for $325 million of its 11% notes due 2009.

However Triad chief financial officer Burke Whitman told Prospect News that the figure in the press release should be regarded as the minimum amount of the intended offering.

"It could be more," Whitman said, adding that in addition to funding the above-mentioned tender, proceeds could be used to fund "ongoing operations or possible expansion."

Whitman said that the deal is expected to launch near the Nov. 4 expiration date of the consent solicitation.

Merrill Lynch & Co. and Banc of America Securities are dealer-managers on the tender.

Whitman declined to specify what interest rate Triad anticipated with the pending bond offer.

"There are two benefits to this deal," he said. "Better interest rates and more favorable covenants in the bonds. A combination of those two things are what make this deal sensible.

"We've been pleased with where our two existing issues have been trading," the Triad CFO added. "The high-yield market has been very supportive of this industry and of our paper for several months and specifically over the past several weeks.

"This is a favorable environment in which to improve on rates and covenants."

Triad Hospitals is a Plano, Tex.-based owner of hospitals and ambulatory surgery centers in small cities and selected larger urban markets.

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