Tenet starts roadshow for $4.6 billion two-part notes offering

By Paul A. Harris

Portland, Ore., Sept. 9 - Tenet Healthcare Corp. began a roadshow on Monday for a $4.6 billion two-part offering of high-yield notes, according to a syndicate source.

The deal is coming in the form of two bullet tranches: a $1.8 billion trance of seven-year senior secured notes and a $2.8 billion tranche of 8.5-year senior unsecured notes.

An investor call is set for Tuesday, and the deal is scheduled to price on Friday.

BofA Merrill Lynch is the left bookrunner. Barclays, Citigroup Global Markets Inc. and Wells Fargo Securities LLC are the joint bookrunners.

Scotia Capital, SunTrust Robinson Humphrey Inc. and Morgan Stanley & Co. LLC are the co-managers.

The Rule 144A with registration rights and Regulation S notes, in both tranches, come with make-whole provisions at Treasuries plus 50 basis points.

Proceeds will be used to help fund the acquisition of Vanguard Health and also to refinance some of Vanguard's existing debt.

The $1.8 billion tranche of secured notes represents a shift in the company's plans for financing the acquisition. Initially the secured debt was expected to come in the form of a bank loan.

The issuing entity will be THC Escrow Corp., which will be assumed by Tenet, a Dallas-based health care services company.

Vanguard is a Nashville, Tenn.-based owner and operator of acute care and specialty hospitals and complementary facilities.

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