Published on 6/29/2010 in the Prospect News High Yield Daily.
New Issue: Vanguard Health sells $225 million add-on to 8% notes due 2018 at 96.25 to yield 8.686%
By Paul A. Harris
St. Louis, June 29 - Vanguard Health Holding Co. II, LLC and Vanguard Holding Co. II, Inc. priced a $225 million add-on to their 8% senior notes due Feb. 1, 2018 (B3) at 96.25 on Tuesday, according to an informed source.
The resulting yield is 8.686%.
The reoffer price came at the cheap end of the 96.25 to 96.50 price talk.
Bank of America Merrill Lynch, Barclays Capital Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman, Sachs & Co. and Morgan Stanley & Co. Inc. were the joint bookrunners for the quick-to-market sale.
Proceeds will be used to partially finance the acquisition of substantially all of the assets of the Detroit Medical Center.
The original $950 million issue priced at 98.555 to yield 8¼% on Jan. 21, 2010. That issue was downsized from $1 billion.
The issuing entities are subsidiaries of Nashville, Tenn.-based Vanguard Health Systems, Inc., which owns and operates hospitals and provides related services.
| Issuers: | Vanguard Health Holding Co. II, LLC and Vanguard Holding Co. II, Inc.
|
| Face amount: | $225 million
|
| Proceeds: | $216,563,000 (approximate)
|
| Maturity: | Feb. 1, 2018
|
| Securities: | Fungible add-on to the 8% senior notes
|
| Bookrunners: | Bank of America Merrill Lynch, Barclays Capital Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman, Sachs & Co., Morgan Stanley & Co. Inc.
|
| Coupon: | 8%
|
| Price: | 96.25
|
| Yield: | 8.686%
|
| Spread: | 629 bps
|
| Call features: | Make-whole call at Treasuries plus 50 bps until Feb. 1, 2014, then callable at 104.0, 102.0, par on and after Feb. 1, 2016
|
| Equity clawback: | 35% at 108.0 until Feb. 1, 2013
|
| Change-of-control put: | 101%
|
| Trade date: | June 29
|
| Settlement date: | July 14 with accrued interest
|
| Rating: | Moody's: B3
|
| Distribution: | Rule 144A and Regulation S with registration rights
|
| Price talk: | 96.25 to 96.50
|
| Original issue: | $950 million priced at 98.555 to yield 8¼% on Jan. 21, 2010
|
| Total issue size: | $1.175 billion
|
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