Tenet Announces $1.4 Billion Private Offering of Senior Secured Notes

Rhea-AI Summary

Tenet Healthcare Corporation (NYSE: THC) announced a private placement offering of $1.4 billion in senior secured first lien notes maturing in 2029. The proceeds will finance the redemption of its outstanding 5.125% second lien notes due 2025. The notes will be guaranteed by certain subsidiaries and secured by a first lien on specific assets, ranking senior to existing and future junior debts. The offering is not registered under the Securities Act, limiting its sale to qualified institutional buyers. A confidential offering memorandum will be provided to eligible persons.

Positive

• Intended to redeem higher-cost second lien notes, potentially reducing interest expenses.
• Notes secured with a first lien priority, enhancing creditor confidence.

Negative

• Private placement limits access to a broader investor base due to Securities Act restrictions.
• Potential dilution of existing debt holders' positions if notes are not positively received in the market.

Tenet Healthcare Corporation (NYSE: THC) today announced a private placement offering of $1.4 billion in aggregate principal amount of newly issued senior secured first lien notes maturing in 2029 (the “notes”). Completion of the offering is subject to, among other things, pricing and standard closing and market conditions.

Tenet intends to use the net proceeds from the sale of the notes, after payment of fees and expenses, to finance, together with cash on hand, the redemption of all of its outstanding 5.125% senior secured second lien notes due 2025 (the “2025 second lien notes”).

The notes will be guaranteed by certain of Tenet’s subsidiaries and secured on a first lien priority basis by a pledge of the capital stock and other ownership interests of certain of Tenet’s subsidiaries. The notes will be effectively senior to Tenet’s existing and future indebtedness secured on a more junior basis, as well as unsecured indebtedness and other liabilities, to the extent of the value of the collateral securing such borrowings.

The notes to be offered will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), or any other state securities laws. As a result, they may not be offered or sold in the United States or to any U.S. persons, except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Accordingly, the notes will be offered only to persons reasonably believed to be “qualified institutional buyers” under Rule 144A of the Securities Act or, outside the United States, to persons other than “U.S. persons” in compliance with Regulation S under the Securities Act. A confidential offering memorandum for the notes will be made available to such eligible persons. The offering will be conducted in accordance with the terms and subject to the conditions set forth in such offering memorandum.

This news release is neither an offer to sell nor a solicitation of an offer to buy, nor shall there be any sale of, these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. This news release shall not constitute a notice of redemption of the 2025 second lien notes.

Cautionary Statement

This release contains “forward-looking statements” - that is, statements that relate to future, not past, events. In this context, forward-looking statements often address the Company's expected future business and financial performance and financial condition, and often contain words such as “expect,” “anticipate,” “assume,” “believe,” “budget,” “estimate,” “forecast,” “intend,” “plan,” “predict,” “project,” “seek,” “see,” “target,” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. Particular uncertainties that could cause the Company's actual results to be materially different than those expressed in the Company's forward-looking statements include, but are not limited to, the factors disclosed under “Forward-Looking Statements” and “Risk Factors” in our Form 10-K for the year ended December 31, 2020, any subsequent Form 10-Q filings and other filings with the Securities and Exchange Commission.

About Tenet Healthcare

Tenet Healthcare Corporation (NYSE: THC) is a diversified healthcare services company headquartered in Dallas with 108,000 employees. Through an expansive care network that includes United Surgical Partners International, we operate 65 hospitals and approximately 450 other healthcare facilities, including surgical hospitals, ambulatory surgery centers, imaging centers and other care sites and clinics. We also operate Conifer Health Solutions, which provides revenue cycle management and value-based care services to hospitals, health systems, physician practices, employers and other clients. Across the Tenet enterprise, we are united by our mission to deliver quality, compassionate care in the communities we serve.

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FAQ

What is Tenet Healthcare's latest financial offering?

Tenet Healthcare announced a $1.4 billion private placement of senior secured first lien notes maturing in 2029.

What will the proceeds from the THC notes offering be used for?

The proceeds will finance the redemption of all outstanding 5.125% senior secured second lien notes due 2025.

Who can purchase the new notes issued by Tenet Healthcare?

The notes will be offered only to qualified institutional buyers and eligible persons outside of the U.S.

What is the maturity date of the new senior secured notes by Tenet Healthcare?

The new notes will mature in 2029.

How does the new offering affect existing Tenet Healthcare debt holders?

The new offering could impact existing debt holders' positions due to the secured nature of the new notes compared to existing junior debts.