Healthcare Business News

Tenet continues cutting interest expenses through debt refinancing

By Beth Kutscher
Posted: June 12, 2014 - 2:45 pm ET

Tenet Healthcare Corp. is continuing its efforts to refinance its debt at lower interest rates, offering $500 million in unsecured senior notes in a private placement.

The notes, which priced Wednesday, will carry a 5% interest rate and mature in 2019. They will be issued at a premium of 101.5%, effectively paying holders slightly less than the face rate of 5%.

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Tenet described the offering as a reopening of its March 10 private placement (PDF), when it issued $600 million in senior notes, also with a 5% interest rate and maturing in 2019. That offering was used to prefund an acquisition and pay down its revolving credit facility, CEO Trevor Fetter told Modern Healthcare earlier this year.

Low interest rates and looser covenants on debt have created an ideal borrowing environment for healthcare providers, with Fetter calling it “a uniquely great time to access the capital markets.”

The Dallas-based chain will use the proceeds from its current bond issuance to redeem its 9.25% senior notes due 2015.

Follow Beth Kutscher on Twitter: @MHbkutscher

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