Community Health details tranching on $6.95 billion credit facility for Triad buy

By Sara Rosenberg

New York, April 2 - Community Health Systems Inc. detailed the structure of its proposed $6.95 billion senior secured credit facility that will be obtained in connection with the acquisition of Triad Hospitals Inc., according to a PREM14A filed with the Securities and Exchange Commission late Friday.

The facility will be comprised of a $5.7 billion seven-year term loan, a $500 million seven-year delayed-draw term loan and a $750 million six-year revolver.

Previously, it was known that the total loan size would be $6.95 billion and that the commitment included $1.25 billion of undrawn available capital, but specifics on tranching were unavailable.

Credit Suisse and Wachovia are the lead banks on the deal.

Under the agreement, Community Health is buying Triad for $54.00 per share in cash, or $6.8 billion, including $1.7 billion of existing indebtedness.

The funded term loan will be used to help finance the acquisition and refinance existing indebtedness, and the delayed-draw term loan and revolver will be used for working capital and general corporate purposes.

As was previously reported, other acquisition financing will come from $3.365 billion of senior unsecured notes.

Total debt to LTM adjusted EBITDA is expected to be 6.3 times.

The acquisition is expected to close in the third quarter, subject to certain closing conditions, including approval by Triad's stockholders, antitrust clearance and other regulatory approvals. There is no financing condition.

Community Health is a Nashville, Tenn., operator of general acute care hospitals in non-urban communities. Triad is a Plano, Texas, owner and manager of hospitals and ambulatory surgery centers.

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