Highmark said it reached an agreement to buy out bondholders of the financially distressed West Penn Allegheny Health System for 87.5 cents on the dollar. The insurer and health system have also renegotiated their acquisition deal.
Highmark, an insurer seeking to acquire West Penn Allegheny, reached the agreement in talks with five major bondholders for $726 million of the health system's outstanding debt, a notice to investors said (PDF). Both are based in Pittsburgh. The insurer and health system are also finishing negotiations to amend their acquisition agreement, which will be submitted to the state insurance regulators.
Highmark's spokesman declined to comment, but in a news release officials said the deal would avoid the courts, cut West Penn Allegheny's debt and strengthen the system's balance sheet.