Community Health Systems, Franklin, Tenn., and some of its creditors have agreed to extend the maturity on $1.5 billion it owes under term loans that funded its acquisition of Triad Hospitals in 2007, according to a Community news release.
Community Health reaches deal on term loans
The agreement pushes back the due date by 2½ years, from July 2014 to January 2017. Community agreed to pay 1.25 percentage points higher interest on the extended portion of its term loans, according to the company. The rate will be 3.5 percentage points above the London Interbank Offered Rate, or Libor. The higher rate will cost the company about 3.7% of its expected earnings per share in 2011, according to a report by Gary Lieberman, a senior analyst with Wells Fargo Securities.
Community owes an additional $4.5 billion on the term loans that remains due in July 2014 and at the same interest rate, which is 2.25 percentage points above Libor.
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