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Item 2.03.
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
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On September 16, 2020, Tenet Healthcare Corporation (“Tenet”) issued $2,500,000,000 in aggregate principal amount of 6.125% senior notes due 2028 (the “Notes”).
The Notes were issued pursuant to an indenture, dated as of November 6, 2001 (the “Base Indenture”), between Tenet and The Bank of New York Mellon Trust Company, N.A., as successor trustee to The Bank of New York as trustee (in such capacity, the “Trustee”), as supplemented by the thirty-sixth supplemental indenture, dated as of September 16, 2020 (the “Thirty-Sixth Supplemental Indenture” and the Base Indenture, as supplemented by the Thirty-Sixth Supplemental Indenture, the “Indenture”), between Tenet and the Trustee.
Tenet intends to use the net proceeds from the sale of the Notes, after payment of fees and expenses, to finance, together with cash on hand, the redemption of all of the Company’s outstanding 8.125% Senior Notes due 2022.
The Indenture contains covenants that, among other things, restrict Tenet’s ability and the ability of its subsidiaries to: incur liens; enter into sale and lease-back transactions; or consolidate, merge or sell all or substantially all of their assets, other than in certain transactions between one or more of Tenet’s wholly owned subsidiaries and Tenet. These restrictions, however, are subject to a number of important exceptions and qualifications. In particular, there are no restrictions on Tenet’s ability or the ability of its subsidiaries to incur additional indebtedness, make restricted payments, pay dividends or make distributions in respect of capital stock, purchase or redeem capital stock, enter into transactions with affiliates or make advances to, or invest in, other entities (including unaffiliated entities).
The Indenture also provides that the Notes may become subject to redemption under certain circumstances, including a change of control (as defined in the Indenture) of Tenet. Prior to October 1, 2023, Tenet may, at its option, redeem the Notes in whole or in part, at a redemption price equal to 100% of the principal amount of the Notes being redeemed plus the make-whole premium set forth in the Indenture, together with accrued and unpaid interest. On and after October 1, 2023, Tenet may, at its option, redeem the Notes in whole or in part, at certain redemption prices (expressed as percentages of the principal amount thereof) set forth in the Indenture, together with accrued and unpaid interest.
In connection with the issuance of the Notes, Tenet also entered into an exchange and registration rights agreement, dated as of September 16, 2020 (the “Registration Rights Agreement”), with Barclays Capital Inc., as representative of the several initial purchasers named in the purchase agreement for the Notes. Pursuant to the Registration Rights Agreement, in certain circumstances, Tenet has agreed to use commercially reasonable efforts to register the Notes with the Securities and Exchange Commission if the Notes have not become freely tradable (as defined in the Registration Rights Agreement) on or before the 380th day following the date hereof.
The foregoing is a summary and is qualified by reference to the Base Indenture, the Thirty-Sixth Supplemental Indenture and the Registration Rights Agreement, which are filed herewith as Exhibits 4.1, 4.2 and 10.1, respectively, and are incorporated herein by reference.