Earlier this week,
Tenet Healthcare Corp.
) announced an offer to sell new 4.375% senior secured notes due
2021. The notes, which are worth $1.05 billion, will be sold
through private placement.
The offer is scheduled to close on May 30, 2013. Fitch Ratings
has assigned a "BB/RR1" rating to the notes with a stable
The capital stock and other ownership interests of a few Tenet
Healthcare subsidiaries will act as collateral for the secured
notes. The new notes are ranked at par with 6.25% senior secured
notes due 2018, 8.875% senior secured notes due 2019, 4.750%
senior secured notes due 2020 and 4.500% senior secured notes due
2021, which are secured with similar collateral.
Moreover, these notes are effectively senior to Tenet
Healthcare's existing and future unsecured indebtedness and other
liabilities up to the value of the collateral and are senior to
all the existing and future subordinated debt. However, the new
notes will be subordinated to the company's senior secured
revolving credit facility obligations and the secured guarantees
of its subsidiaries up to the value of the collateral securing
the borrowings made under the facility.
Tenet Healthcare will use the proceeds from the private
placement to buy back its outstanding 8.875% senior secured notes
due 2019. The company announced a tender offer for the same on
May 15, 2013.
Tenet Healthcare will make the payment for the outstanding
notes, worth $925 million, in cash. The company has also called
for an amendment to the indenture related to the notes and is
seeking the consent of the holders.
While the offer is set to expire on Jun 12, 2013, holders who
give their consent for the amendment and submit valid tenders for
the notes before the consent payment deadline on May 29, 2103,
will receive a consent payment of $30 per $1,000 principal value
of the notes in addition to the offer consideration of $1,103.18
per $1,000 principal value and any accrued and unpaid interest
from Tenet Healthcare. Holders who tender their notes after the
consent payment date but before the expiry of the offer will only
receive $1,103.18 per $1,000 principal value and any accrued and
Tenet Healthcare carries a Zacks Rank #3 (Hold). Other stocks
worth considering in the medical sector are
VCA Antech Inc.
) - Zacks Rank #1 (Strong Buy),
Molina Healthcare Inc.
) - Zacks Rank #1 (Strong Buy) and
) - Zacks Rank #2 (Buy).
MOLINA HLTHCR (MOH): Free Stock Analysis
TENET HEALTH (THC): Free Stock Analysis
WELLPOINT INC (WLP): Free Stock Analysis
VCA ANTECH INC (WOOF): Free Stock Analysis
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