Vanguard Health to start roadshow Thursday for $700 million two-part deal

By Paul A. Harris

St. Louis, Sept. 7 - Subsidiaries of Vanguard Health Systems Inc. will begin a roadshow Thursday for a $700 million proceeds two-part note offering, according to an informed source.

The roadshow is scheduled to conclude on Sept. 20.

Vanguard Health Holding Co. II LLC and Vanguard Holding Co. II Inc. plan to sell $560 million of 10-year senior subordinated notes that are non-callable for five years.

Meanwhile, Vanguard Holding Co. I LLC and Vanguard Holding Co. I Inc. plan to sell $140 million (approximate proceeds) of 11-year senior discount notes, which are non-callable for five years. The senior discount notes will mature in 2015.

Citigroup and Banc of America Securities are joint bookrunners for the Rule 144A offerings. Bear Stearns & Co., JP Morgan, Merrill Lynch & Co., Wachovia Securities and ABN Amro are co-managers.

The company will also obtain a new $1.05 billion credit facility.

The acquisition of the company by an investor group led by The Blackstone Group will be completed with the closing of these offerings.

Proceeds together with the equity contribution to be made by the investor group will be used to fund the acquisition, to repurchase the company's existing 9¾% senior subordinated notes due 2011 and repay all debt under the existing senior secured credit facilities.

Vanguard Health Systems is a Nashville, Tenn.-based owner/operator of comprehensive healthcare delivery networks in urban markets.

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