20 Jan, 2022

Community Health Systems prints secured bonds at par to yield 5.25%; terms

Community Health Systems Inc. has placed $1.535 billion of 5.25% senior secured notes due May 2030 at the tight end of price guidance, according to market sources. The deal was led by Citigroup.

Proceeds will be used alongside balance sheet cash to redeem the company's outstanding $1.462 billion of 6.625% senior secured notes due 2025 at par, plus a make-whole redemption price, which the company estimates to be approximately 103.5%.

Moody's today said, "While the transaction will be slightly leveraging, it is credit positive as it will extend Community's debt maturity profile and lower its cash interest costs."

Community Health Systems owns, leases and operates general acute-care hospitals in the U.S. As of Oct. 1, 2021, the company owned or leased 83 hospitals with an aggregate of approximately 13,000 licensed beds, comprising 81 general acute-care hospitals and two stand-alone rehabilitation or psychiatric hospitals, according to the company.

Terms:

Issuer CHS/Community Health Systems Inc.
Ratings B/B2/BB-
Amount $1.535 billion
Issue Senior secured notes (144A/Reg S for life)
Coupon 5.25%
Price 100
Yield 5.25%
Spread T+347
Maturity May 15, 2030
Call First call on May 1, 2025, at 102.625%; then 101.313% on May 15, 2026; then par on May 15, 2027, and thereafter
Trade (date) Jan. 20, 2022
Settle Feb. 4, 2022 (T+11)
Joint lead bookrunners C (Lead)/CS/JPM
Joint bookrunners RBC/WF/CapOne/Truist/BofA/GS
Price talk 5.375% area
Notes Change of control put at 101%; up-to-40% equity claw at 105.25% prior to May 15, 2025; issuer may redeem up-to-10% of notes at 103% each 12-month period during the first three years; make-whole at T+50 prior to May 15, 2025.