Tenet Announces Upsizing and Pricing of its $2.000 Billion Private Offering of Senior Secured Notes

Rhea-AI Summary

Tenet Healthcare Corporation (NYSE: THC) has priced a private placement offering, issuing $2.000 billion in senior secured first lien notes due June 15, 2030, at an interest rate of 6.125% per annum. The offering amount increased from $1.800 billion. Proceeds will finance the redemption of $1.748 billion of 2023 senior notes and for general corporate purposes. Notably, the notes will not be registered under the Securities Act, limiting sales to qualified institutional buyers. The completion is expected on June 15, 2022, pending customary closing conditions.

Positive

• Offering increased from $1.800 billion to $2.000 billion, indicating strong investor interest.
• Intended use of proceeds includes the redemption of $1.748 billion of 6.750% senior notes, likely improving overall financial health.

Negative

• Potential shareholder dilution due to new debt issuance.
• Notes will not be registered under the Securities Act, limiting marketability.

DALLAS--(BUSINESS WIRE)-- Tenet Healthcare Corporation (NYSE: THC) today announced the pricing of the previously announced private placement offering and has agreed to issue and sell $2.000 billion in aggregate principal amount of senior secured first lien notes due on June 15, 2030, which will bear interest at a rate of 6.125% per annum (the “notes”). The aggregate principal amount of notes to be issued in the offering was increased to $2.000 billion from the previously announced amount of $1.800 billion. Completion of the notes offering is expected to occur on June 15, 2022, and is subject to, among other things, customary closing conditions.

Tenet intends to use the net proceeds from the sale of the notes, after payment of fees and expenses, to finance the redemption of all $1.748 billion outstanding of its 6.750% senior notes due 2023 (the “2023 Notes”) and for general corporate purposes.

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/20220601006241/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 the size of the private placement offering by Tenet Healthcare (THC)?

Tenet Healthcare announced a private placement offering of $2.000 billion in senior secured first lien notes.

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

The proceeds will be used to redeem $1.748 billion of outstanding 2023 senior notes and for general corporate purposes.

When will Tenet's notes offering be completed?

The completion of the notes offering is expected to occur on June 15, 2022.

What interest rate will Tenet's new notes carry?

The new notes will bear an interest rate of 6.125% per annum.

Are Tenet's new notes registered under the Securities Act?

No, the notes will not be registered under the Securities Act and can only be offered to qualified institutional buyers.