Tenet pricing $2.4 billion two-part notes offering on Tuesday

By Paul A. Harris

Portland, Ore., June 2 – Tenet Healthcare Corp. plans to sell $2.4 billion of high-yield notes in a two-part quick-to-market transaction on Tuesday trailing a mid-morning conference call with investors, an informed source said.

Tenet Healthcare is offering $500 million of five-year senior secured floating-rate notes (existing ratings Ba2/B+), which are callable after one year at 101.

THC Escrow Corp. II, a special purpose vehicle, is offering $1.9 billion of non-callable eight-year senior unsecured notes (existing ratings B3/CCC+).

Barclays is the lead left bookrunner for the Rule 144A and Regulation S with registration rights offering. Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co., RBC Capital Markets and SunTrust Robinson Humphrey Inc. are the joint bookrunners.

Proceeds will be used to refinance the existing senior secured and senior unsecured bridge loans and 364-day term loan in connection with a joint venture with Welsh, Carson, Anderson & Stowe and United Surgical Partners International, combining Tenet’s and United Surgical’s short-stay surgery and imaging-center assets, and the acquisition of Aspen Healthcare Ltd. from Welsh Carson. Proceeds from the unsecured notes only will be escrowed pending the close of the joint venture.

Tenet is the Dallas-based owner and operator of acute care hospitals, ambulatory surgery centers, diagnostic imaging centers and related health care facilities.

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