By Paul A. Harris
Portland, Ore., Jan. 19 – CHS/Community Health Systems Inc. priced a massively upsized $1.775 billion issue of eight-year junior-priority secured notes (Caa3/CCC-/CC) at par to yield 6 7/8% in a Tuesday drive-by, according to market sources.
The issue size increased from $750 million.
Proceeds, including the additional proceeds resulting from the $1.025 billion upsizing of the deal, will be used to refinance the 11% junior-priority secured notes due 2023.
The market was skeptical of the $750 million size on the wrapper of the deal that was announced on Tuesday morning, given that the Franklin, Tenn.-based operator of acute care and outpatient facilities ultimately had around $1.77 billion of the 11% notes due 2023 outstanding, a trader remarked.
The yield printed at the tight end of yield talk in the 7% area. Initial talk was in the low 7% area.
Credit Suisse Securities (USA) LLC was the left lead bookrunner. Joint bookrunners were Citigroup Global Markets Inc., J.P. Morgan Securities LLC, BofA Securities Inc., RBC Capital Markets LLC, Wells Fargo Securities LLC, Capital One Securities Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC and Truist Securities Inc.
| Issuer: | CHS/Community Health Systems Inc.
|
| Amount: | $1.775 billion, increased from $750 million
|
| Maturity: | April 15, 2029
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| Securities: | Junior-priority secured notes
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| Left lead bookrunner: | Credit Suisse Securities (USA) LLC
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| Joint bookrunners: | Citigroup Global Markets Inc., J.P. Morgan Securities LLC, BofA Securities Inc., RBC Capital Markets LLC, Wells Fargo Securities LLC, Capital One Securities Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC and Truist Securities Inc.
|
| Coupon: | 6 7/8%
|
| Price: | Par
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| Yield: | 6 7/8%
|
| Spread: | 594 bps
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| First call: | April 15, 2024 at 103.438
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| Trade date: | Jan. 19
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| Settlement date: | Feb. 2
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| Ratings: | Moody's: Caa3
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| S&P: CCC-
|
| Fitch: CC
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| Distribution: | Rule 144A and Regulation S
|
| Price talk: | 7% area
|
| Marketing: | Drive-by
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