Vanguard tenders for 9¾% notes

New York, July 27 - Vanguard Health Systems, Inc. said it has begun a cash tender offer and consent solicitation for any and all of its $300 million principal amount of 9¾% senior subordinated notes due 2011.

The company will pay price for each $1,000 principal amount of notes based on a fixed spread of 50 basis points over the yield on the pricing date of the 7% U.S. Treasury note due July 15, 2006, plus accrued and unpaid interest up to, but not including, the date of payment for the notes, minus the consent payment. The price determination date will be Aug. 10.

Holders who deliver consents to indenture amendments to eliminate substantially all of the restrictive covenants by 5 p.m. ET on Aug. 9 will receive a consent payment of $20.00 per $1,000 principal amount of notes.

The offer expires at 11:59 p.m. ET on Aug. 23.

Holders may not tender without delivering consents or vice versa.

The Nashville, Tenn. hospital operator is carrying out the offer in connection with its recently announced agreement to receive a major investment form The Blackstone Group.

The offer is subject to conditions including those relating to Blackstone's investment and the receipt of consents from holders of a majority of the outstanding notes.

Citigroup Global Markets Inc. at (800 558-3745 or call collect 212 723-6106) and Banc of America Securities LLC at (888 292-0070 or call collect 704 388-4813) are dealer managers and solicitation agents.

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