Community Health Systems Announces Final Results and Expiration of Previously Announced Exchange Offers
June 20 2018 - 7:00AM
Business Wire
Community Health Systems, Inc. (the “Company”) (NYSE:CYH) today
announced the final results, as of midnight, New York City time, at
the end of the day on June 19, 2018 (such time and date, the
“Expiration Date”), of offers by its wholly owned subsidiary,
CHS/Community Health Systems, Inc. (the “Issuer”), to exchange
(each, an “Exchange Offer” and, collectively, the “Exchange
Offers”) (i) up to $1,925 million aggregate principal amount of its
new Junior-Priority Secured Notes due 2023 (the “2023 Notes”) in
exchange for any and all of its $1,925 million aggregate principal
amount of outstanding 8.000% Senior Unsecured Notes due 2019 (the
“2019 Notes”), (ii) up to $1,200 million aggregate principal amount
of its new 8.125% Junior-Priority Secured Notes due 2024 (the “2024
Notes” and, together with the 2023 Notes, the “New Notes”) in
exchange for any and all of its $1,200 million aggregate principal
amount of outstanding 7.125% Senior Unsecured Notes due 2020 (the
“2020 Notes”) and (iii) to the extent that less than all of the
outstanding 2019 Notes and 2020 Notes are tendered in the Exchange
Offers, up to an aggregate principal amount of 2024 Notes equal to,
when taken together with the New Notes issued in exchange for the
validly tendered and accepted 2019 Notes and 2020 Notes, $3,125
million, in exchange for its outstanding 6.875% Senior Unsecured
Notes due 2022 (the “2022 Notes” and, together with the 2019 Notes
and the 2020 Notes, the “Old Notes”). The maximum aggregate
principal amount of New Notes issued in the Exchange Offers will
not exceed $3,125 million (the “Maximum Exchange Amount”).
The Issuer was advised by the exchange agent for the Exchange
Offers that, as of the Expiration Date, a total of (i)
$1,770,337,000 aggregate principal amount of outstanding 2019
Notes, representing approximately 92% of the outstanding 2019
Notes, (ii) $1,078,740,000 aggregate principal amount of
outstanding 2020 Notes, representing approximately 90% of the
outstanding 2020 Notes, and (iii) $2,836,971,000 aggregate
principal amount of outstanding 2022 Notes, representing
approximately 94.5% of the outstanding 2022 Notes, were validly
tendered (and not validly withdrawn) in the Exchange Offers.
Because the aggregate principal amount of Old Notes validly
tendered as of the Expiration Date would, if accepted for exchange,
cause the Maximum Exchange Amount to be exceeded, pursuant to the
terms of the Exchange Offer, tenders of 2022 Notes will be accepted
on a pro rata basis, subject to a proration factor of approximately
13%.
All conditions to the Exchange Offers (including the condition
that at least 90% of the outstanding aggregate principal amount of
the 2019 Notes are tendered) have been satisfied. As such, the
Issuer expects to accept for exchange all 2019 Notes and all 2020
Notes validly tendered (and not validly withdrawn) prior to the
Expiration Date and $368,131,000 aggregate principal amount of 2022
Notes validly tendered (and not validly withdrawn) prior to the
Expiration Date.
Holders of Old Notes who tendered prior to the Expiration Date
are eligible to receive the total consideration of (i) $1,000
principal amount of 2023 Notes per $1,000 principal amount of 2019
Notes tendered and accepted for exchange, (ii) $1,000 principal
amount of 2024 Notes per $1,000 principal amount of 2020 Notes
tendered and accepted for exchange and (iii) $750 principal amount
of 2024 Notes per $1,000 principal amount of 2022 Notes tendered
and accepted for exchange (subject to the proration described
above). Accordingly, the Issuer expects to issue $1,770,337,000
aggregate principal amount of 2023 Notes and $1,354,663,000
aggregate principal amount of 2024 Notes on the settlement date for
the Exchange Offers. The settlement date for the Exchange Offers is
expected to be June 22, 2018.
Each series of New Notes will be guaranteed by the Company and
certain of its existing and future domestic subsidiaries that
guarantee the Issuer’s outstanding senior secured credit
facilities, ABL facility and senior notes. In addition, each series
of New Notes and related guarantees will be secured by (i)
second-priority liens on the collateral that secures on a
first-priority basis the Issuer’s outstanding senior secured credit
facilities (subject to certain exceptions) and existing secured
notes and (ii) third-priority liens on the collateral that secures
on a first-priority basis the Issuer’s outstanding ABL facility, in
each case subject to permitted liens described in the Offering
Memorandum.
The New Notes have not been registered under the Securities Act
of 1933, as amended (the “Securities Act”) or any state securities
laws. The New Notes may not be offered or sold in the United States
or to any U.S. persons except pursuant to an exemption from, or in
a transaction not subject to, the registration requirements of the
Securities Act. The Exchange Offers were made, and each series of
New Notes are being offered and issued only (i) in the United
States to holders of Old Notes who the Issuer reasonably believes
are “qualified institutional buyers” (as defined in Rule 144A under
the Securities Act) and (ii) outside the United States to holders
of Old Notes who are (A) persons other than U.S. persons, within
the meaning of Regulation S under the Securities Act, and (B)
“non-U.S. qualified offerees” (as defined in the Offering
Memorandum).
The complete terms and conditions of the Exchange Offers are set
forth in the Offering Memorandum and related Letter of Transmittal.
Copies of the Offering Memorandum and Letter of Transmittal may be
obtained from Global Bondholder Services Corporation, the exchange
agent and information agent for the Exchange Offers, at (866)
470-3800 (toll free) or (212) 430-3774 (collect).
This press release is for informational purposes only. This
press release is neither an offer to sell nor a solicitation of an
offer to buy any New Notes and is neither an offer to purchase nor
a solicitation of an offer to sell any Old Notes. The Exchange
Offers were made only by, and pursuant to, the terms set forth in
the Offering Memorandum and the Letter of Transmittal. The Exchange
Offers were not made to persons in any jurisdiction in which the
making or acceptance thereof would not be in compliance with the
securities, blue sky or other laws of such jurisdiction.
Forward-Looking Statement
This press release may include information that could constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements involve
risk and uncertainties. The Company undertakes no obligation to
revise or update any forward-looking statements, or to make any
other forward-looking statements, whether as a result of new
information, future events or otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20180620005563/en/
Community Health Systems, Inc.Thomas J. Aaron,
615-465-7000Executive Vice President and Chief Financial
OfficerorRoss W. Comeaux, 615-465-7012Vice President – Investor
Relations
Community Health Systems (NYSE:CYH)
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