Tenet Announces $1.800 Billion Private Offering of Senior Secured Notes

Rhea-AI Summary

Tenet Healthcare Corporation (NYSE: THC) announced a private placement offering of $1.800 billion in senior secured first lien notes maturing in 2030. The offering, subject to pricing and closing conditions, aims to finance the redemption of $1.748 billion of its 6.750% senior notes due 2023. The new notes will be secured by certain subsidiaries and are effectively senior to existing and future indebtedness. The offering will be limited to qualified institutional buyers and will not be registered under the Securities Act, impacting its availability in the U.S.

Positive

• Offering of $1.800 billion in senior secured first lien notes to refinance existing debt.
• Proceeds intended to redeem $1.748 billion of senior notes due 2023.

Negative

• Notes not registered under Securities Act, limiting market access.
• Potential dilution risk if not managed properly.

DALLAS--(BUSINESS WIRE)-- Tenet Healthcare Corporation (NYSE: THC) today announced a private placement offering of $1.800 billion in aggregate principal amount of new senior secured first lien notes maturing in 2030 (the “notes”). Completion of the notes offering is subject to, among other things, pricing and customary closing 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 $1.748 billion outstanding of its 6.750% senior notes due 2023 (the “2023 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 2023 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 Tenet’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, especially with regard to developments related to COVID-19. Particular uncertainties that could cause Tenet’s actual results to be materially different than those expressed in Tenet’s forward-looking statements include, but are not limited to, the impact of the COVID-19 pandemic and other factors disclosed under “Forward-Looking Statements” and “Risk Factors” in our Form 10-K for the year ended December 31, 2021, our Form 10-Q for the quarter ended March 31, 2022 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. Our care delivery network includes United Surgical Partners International, the largest ambulatory platform in the country, which operates or has ownership interests in approximately 440 ambulatory surgery centers and surgical hospitals. We also operate 60 acute care and specialty hospitals, approximately 110 other outpatient facilities, a network of leading employed physicians and a global business center in Manila, Philippines. Our Conifer Health Solutions subsidiary 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. For more information, please visit www.tenethealth.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220531006130/en/

Investor Contact:

Will McDowell

469-893-2387

william.mcdowell@tenethealth.com

Media Contact:

Lesley Bogdanow

469-893-2640

mediarelations@tenethealth.com

Source: Tenet Healthcare Corporation

FAQ

What is Tenet Healthcare's recent offering amount?

Tenet Healthcare announced a private placement offering of $1.800 billion.

What will the proceeds from Tenet's offering be used for?

The proceeds will be used to redeem $1.748 billion of its senior notes due 2023.

When do Tenet's new senior notes mature?

The new senior secured first lien notes will mature in 2030.

Who can purchase Tenet's new notes?

The notes are offered only to qualified institutional buyers and are not registered under the Securities Act.

What is the potential risk associated with Tenet's offering for shareholders?

There is a potential dilution risk for existing shareholders if the new notes are not managed properly.