Community Health sets June 7 launch for $6.95 billion credit facility

By Sara Rosenberg

New York, May 31 - Community Health Systems Inc. has scheduled a bank meeting for June 7 to launch its proposed $6.95 billion senior secured credit facility, according to a market source.

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

The facility consists 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, according to filings with the Securities and Exchange Commission.

Proceeds will be used to help fund the acquisition of Triad Hospitals Inc. 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.

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 early in the third quarter, subject to certain closing conditions, including approval by Triad's stockholders. There is no financing condition.

In connection with the acquisition, on Thursday, Community Health commenced a cash tender offer for any and all of its $300 million of 6½% senior subordinated notes due 2012 and Triad began a cash tender offer for any and all of its $600 million of 7% senior notes due 2012 and $600 million of 7% senior subordinated notes due 2013.

The tender offers will expire on June 27.

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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