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Planning future deals, Tenet issues new debt


By Beth Kutscher
Posted: January 22, 2013 - 3:30 pm ET
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Tenet Healthcare Corp., Dallas, is issuing new debt as part of a refinancing effort and to help fund new deals.

The publicly traded for-profit company said in a news release (PDF) that it is offering $850 million in senior secured notes through a private placement. The notes, which mature in 2021 and are priced with an interest rate of 4.5%, will be used to buy back its 10% senior secured notes that mature in 2018.

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Tenet has $714 million outstanding on its 10% senior secured notes due 2018, according to the company (PDF). Note holders will receive $1,164.50 for every $1,000 in principal amount of notes that are accepted for purchase.

The company said it will use any remaining proceeds from the offering announced today to make further debt repayments and for general corporate purposes, including acquisitions.

In a presentation earlier this month at the JP Morgan Healthcare Conference, Tenet noted that is working to reduce and extend its near-term debt maturities (PDF). The company added that it has $2.4 billion in debt that can be redeemed over the next 2 years.

It also said it has the financial flexibility to take advantage of share repurchases and acquisitions.

Earlier this month, Tenet consolidated the operations of two of its Atlanta facilities: 180-bed South Fulton Medical Center and 403-bed Atlanta Medical Center. The move creates the second-largest hospital in Georgia by licensed bed count, according to an e-mailed news release, and helps "ensure long-term stability."

South Fulton will be renamed Atlanta Medical Center-South Campus.


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