A story in the Jan. 20 edition of the Prospect News High Yield Daily incorrectly reported the overall size of Vanguard Health Systems' two-part bond issue and the size of the discount notes issued as part of the offering. A corrected and expanded version of the story follows:
By Paul A. Harris
Portland, Ore., Jan. 20 - Vanguard Health Systems priced an upsized $795 million two-part offering of notes on Friday, according to an informed source.
Issuing at the operating company, Vanguard Health Holding Co. II, LLC and Vanguard Holding Co. II, Inc. priced a downsized $350 million tranche of eight-year senior notes (B3/B-/) at par to yield 7¾%.
The tranche was downsized from $375 million. The yield printed on top of price talk.
Proceeds from the operating company notes will be used for general corporate purposes.
Meanwhile at the holding company, Vanguard Health Systems, Inc. raised $444.655 million with a tranche of five-year senior discount notes (Caal/CCC+/), which priced at 59.508 to yield 10 5/8%.
The holding company tranche was upsized from $375 million. The yield printed in the middle of the 10½% to 10¾% price talk.
The initial $375 million of proceeds from the holding company notes were designated to fund a dividend.
Bank of America Merrill Lynch was the left bookrunner for the quick-to-market deal, the overall size of which was upsized to $795 million from $750 million.
Barclays Capital Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co. and Morgan Stanley & Co. Inc. were the joint bookrunners.
Vanguard is a Nashville, Tenn.-based owner and operator of acute care hospitals and complementary facilities and services.
| Issuer: | Vanguard Health Systems
|
| Amount: | $795 million, increased from $750 million
|
| Left bookrunner: | Bank of America Merrill Lynch
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| Joint bookrunners: | Barclays Capital Inc., Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co., Morgan Stanley & Co. Inc.
|
| Trade date: | Jan. 21
|
| Settlement date: | Jan. 26
|
| Distribution: | Rule 144A with registration rights
|
| Marketing: | Quick to market
|
|
|
| Operating company notes
|
| Issuers: | Vanguard Health Holding Co. II, LLC and Vanguard Holding Co. II, Inc.
|
| Amount: | $350 million, decreased from $375 million
|
| Maturity: | Feb. 1, 2019
|
| Securities: | Senior notes
|
| Coupon: | 7¾%
|
| Price: | Par
|
| Yield: | 7¾%
|
| Spread: | 469 bps
|
| Call protection: | Make-whole call at Treasuries plus 50 bps until Feb. 1, 2014, then callable at 105.813
|
| Ratings: | Moody's: B3
|
| Standard & Poor's: B-
|
| Price talk: | 7¾% area
|
|
|
| Holding company notes
|
| Issuer: | Vanguard Health Systems, Inc.
|
| Face amount: | $747.219 million
|
| Proceeds: | $444.655 million, increased from $375 million
|
| Maturity: | Feb. 1, 2016
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| Securities: | Senior discount notes
|
| Accretion rate: | 10 3/8%
|
| Price: | 59.508
|
| Yield: | 10 5/8%
|
| Spread: | 856 bps
|
| Call protection: | Make-whole call at Treasuries plus 50 bps until Feb. 1, 2013, then callable at 105
|
| Rating: | Moody's: Caa1
|
| Standard & Poor's: CCC+
|
| Price talk: | 10½% to 10¾%
|
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