Community Health Systems, Inc. Announces Offering of $750 Million of Junior-Priority Secured Notes Due 2029

Rhea-AI Summary

Community Health Systems (NYSE: CYH) plans to offer $750 million in Junior-Priority Secured Notes due 2029. The net proceeds will be used to repurchase up to $750 million of its 2023 Junior-Priority Secured Notes and cover related expenses. The offering targets qualified institutional buyers under Rule 144A and is subject to market conditions. The Notes will not be registered under the Securities Act, thus limiting their sale within the U.S. The press release contains forward-looking statements with associated risks and uncertainties.

Positive

• None.

Negative

• Issuing new notes may increase total debt levels.
• The proposed repurchase of existing notes does not guarantee improved financial stability.

Community Health Systems, Inc. (the “Company”) (NYSE: CYH) today announced that its wholly owned subsidiary, CHS/Community Health Systems, Inc. (the “Issuer”), intends to offer $750 million aggregate principal amount of Junior-Priority Secured Notes due 2029 (the “Notes”), subject to market and other conditions (the “Notes Offering”).

The Issuer intends to use the net proceeds of the Notes Offering, together with cash on hand, to repurchase and/or redeem $750 million (the “Tender Cap”) aggregate principal amount of its outstanding Junior-Priority Secured Notes due 2023 (the “2023 Junior-Priority Secured Notes”) and to pay related fees and expenses. In particular, the Issuer intends to use the net proceeds from the Notes Offering (i) to purchase the portion of the Issuer’s outstanding 2023 Junior-Priority Secured Notes that are validly tendered and accepted for purchase in the cash tender offer announced on January 19, 2021, and (ii) to the extent the aggregate principal amount of 2023 Junior-Priority Secured Notes validly tendered and accepted for purchase in the cash tender offer is less than the Tender Cap, redeem or repurchase (in one or more open market repurchases and/or privately negotiated transactions) an aggregate principal amount of 2023 Junior-Priority Secured Notes equal to the amount by which the Tender Cap exceeds the principal amount of 2023 Junior-Priority Secured Notes validly tendered and accepted for purchase in such tender offer.

The Notes will be offered in the United States to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and outside the United States pursuant to Regulation S under the Securities Act. The Notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.

This press release is neither an offer to sell nor a solicitation of an offer to buy any securities, nor shall there be any offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful. Any offers of the Notes will be made only by means of a private offering memorandum. This notice is being issued pursuant to and in accordance with Rule 135(c) under the Securities Act.

Forward-Looking Statements

This press release may include information that could constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve risk and uncertainties. The Company undertakes no obligation to revise or update any forward-looking statements, or to make any other forward-looking statements, whether as a result of new information, future events or otherwise, except as otherwise required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20210119005566/en/

FAQ

What is the purpose of Community Health Systems' $750 million Junior-Priority Secured Notes offering?

The proceeds will be used to repurchase or redeem existing Junior-Priority Secured Notes due 2023.

Who can purchase the $750 million Junior-Priority Secured Notes from Community Health Systems?

The Notes are offered to qualified institutional buyers in the U.S. under Rule 144A and outside the U.S. under Regulation S.

What risks are associated with the Junior-Priority Secured Notes offering by CYH?

The offering includes forward-looking statements that involve risks and uncertainties which the company does not commit to updating.

What is the Tender Cap in Community Health Systems' Notes offering?

The Tender Cap refers to the $750 million aggregate principal amount of 2023 Junior-Priority Secured Notes the company aims to repurchase.

Are the Junior-Priority Secured Notes registered under the Securities Act?

No, the Notes have not been registered under the Securities Act and cannot be offered in the U.S. without an applicable exemption.