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Community Health's $2.9 billion eight-year notes to launch Friday
By Paul A. Harris
Portland, Ore., Jan. 8 - Community Health Systems Inc. is expected to launch a $2,875,000,000 offering of eight-year senior notes on Friday, according to a buyside source, who added that BofA Merrill Lynch will lead the deal.
Whether or not the offering is to come as a drive-by or be marketed on a roadshow has yet to be disclosed, the source said, but added that investors have been made aware that the deal is coming.
Other syndicate names are expected to be announced, the buysider said.
On Wednesday the company kicked off a $2.26 billion term loan via a syndicate of banks that included Credit Suisse Securities (USA) LLC, Bank of America Merrill Lynch, Citigroup Global Markets Inc., Goldman Sachs Bank USA, J.P. Morgan Securities LLC, RBC Capital Markets, SunTrust Robinson Humphrey Inc., UBS Securities LLC, Wells Fargo Securities LLC, Bank of Tokyo Mitsubishi, Compass Bank, Credit Agricole, Deutsche Bank Securities Inc., Fifth Third Securities and Scotia Bank.
Proceeds from the bond and bank debt will be used to help fund the acquisition of Health Management Associates Inc. for $13.78 per share, consisting of $10.50 per share in cash plus 0.06942 of a share of Community Health common stock for each Health Management share, and to refinance existing debt.
The transaction is valued at about $7.6 billion, including the assumption of around $3.7 billion of debt.
Closing is anticipated by the end of this quarter, subject to approval by a 70% vote of Health Management's stockholders, antitrust clearance, receipt of other regulatory approvals, the absence of certain adverse developments and customary conditions. The transaction is not subject to financing.
Community Health is a Nashville, Tenn.-based hospital company. Health Management is a Naples, Fla.-based owner and manager of hospitals and ambulatory surgery centers.
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