Published on 1/15/2014 in the Prospect News High Yield Daily.
New Issue: Community Health prices $4 billion notes in two tranches
By Paul A. Harris
Portland, Ore., Jan. 15 - Community Health Systems, Inc. priced a downsized $4 billion two-part offering of notes on Wednesday, according to syndicate sources.
A downsized $1 billion tranche of 7.5-year senior secured notes (Ba2/BB/) priced at par to yield 5 1/8%. The secured notes tranche was downsized from $1,705,000,000. The yield printed on top of yield talk.
An upsized $3 billion tranche of eight-year senior unsecured notes (B3/B-/B) priced at par to yield 6 7/8%. The unsecured tranche was upsized from $2,875,000,000. The yield printed at the tight end of yield talk in the 7% area.
The overall bond portion of the financing was decreased from $4.58 billion. At the same time the company upsized its seven-year term loan D to $2,925,000,000 from $2.26 billion.
Joint physical bookrunner BofA Merrill Lynch will bill and deliver. Credit Suisse Securities (USA) LLC was also a joint physical bookrunner.
Citigroup Global Markets Inc., Goldman Sachs & Co., J.P. Morgan Securities LLC, RBC Capital Markets, SunTrust Robinson Humphrey Inc., UBS Investment Bank and Wells Fargo Securities LLC were joint bookrunners.
Proceeds will be used to help fund the merger with Health Management Associates Inc.
Community Health is a Nashville-based hospital company. Health Management is a Naples, Fla.-based owner and manager of hospitals and ambulatory surgery centers.
| Issuer: | FWCT-2 Escrow Corp., to be merged with and into Community Health Systems, Inc.
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| Amount: | $4 billion, decreased from $4.58 billion
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| Joint physical bookrunners: | BofA Merrill Lynch (bill and deliver), Credit Suisse Securities (USA) LLC
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| Joint bookrunners: | Citigroup Global Markets Inc., Goldman Sachs & Co., J.P. Morgan Securities LLC, RBC Capital Markets, SunTrust Robinson Humphrey Inc., UBS Investment Bank, Wells Fargo Securities LLC
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| Co-managers: | BBVA, Credit Agricole CIB, Deutsche Bank Securities Inc., Fifth Third Securities, Mitsubishi UFJ, Scotia Capital
|
| Trade date: | Jan. 15
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| Settlement date: | Jan. 24
|
| Distribution: | Rule 144A with registration rights and Regulation S
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| Marketing: | Roadshow
|
|
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| Senior secured notes
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| Amount: | $1 billion, decreased from $1,705,000,000
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| Maturity: | Aug. 1, 2021
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| Coupon: | 5 1/8%
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| Price: | Par
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| Yield: | 5 1/8%
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| Spread: | 274 bps
|
| First call: | Feb. 1, 2017 at 103.844
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| Equity clawback: | 40% at 105.125 until Feb. 1, 2017
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| Price talk: | 5 1/8% area
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|
|
| Senior unsecured notes
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| Amount: | $3 billion, upsized from $2,875,000,000
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| Maturity: | Feb. 1, 2022
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| Coupon: | 6 7/8%
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| Price: | Par
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| Yield: | 6 7/8%
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| Spread: | 434 bps
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| First call: | Feb. 1, 2018 at 103.438
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| Equity clawback: | 40% at 106.875 until Feb. 1, 2017
|
| Price talk: | 7% area
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