On February 18, 2025, HCA Healthcare, Inc. (the “Company”) issued a press release (the “Press Release”) announcing the commencement of its proposed public offering by HCA Inc. (the “Issuer”), a direct, wholly owned subsidiary of the Company, of senior unsecured notes (the “Offering”). The text of the Press Release is set forth as Exhibit 99.1 and is incorporated herein by reference. In connection with the Offering, the Company is disclosing certain information, as set forth below.
As of February 14, 2025, the Issuer has borrowed $2.950 billion under the ABL credit facility (as defined below), a portion of which was used to repay at maturity all $2.600 billion of its 5.375% Senior Notes due 2025.
Prior to the closing of the Offering, the Issuer intends to enter into the New Credit Agreement (as defined below), and, substantially contemporaneously therewith, the Issuer intends to terminate all outstanding commitments and repay all outstanding obligations under (i) that certain credit agreement, dated as of November 17, 2006, as amended and restated on May 4, 2011, February 26, 2014, June 28, 2017, June 30, 2021 and January 4, 2023, among the Issuer, the guarantors party thereto, the lenders from time to time party thereto and Bank of America, N.A., as administrative agent, collateral agent, swingline lender and letter of credit issuer (the “Cash Flow credit facility”) and (ii) that certain credit agreement, dated as of September 30, 2011, as amended and restated on March 7, 2014, June 28, 2017 and June 30, 2021 and as amended on January 4, 2023, among the Issuer, the subsidiary borrowers party thereto, the lenders from time to time party thereto and Bank of America, N.A., as administrative agent, collateral agent, swingline lender and letter of credit issuer (the “ABL credit facility” and together with the Cash Flow credit facility, the “senior secured credit facilities”).
The Cash Flow credit facility provides for a $3.500 billion senior secured revolving credit facility and a senior secured term loan A facility with $1.238 billion outstanding as of December 31, 2024. The ABL credit facility provides for a $4.500 billion senior secured revolving credit facility. The Issuer intends to prepay all outstanding borrowings under the senior secured credit facilities immediately prior to their termination. Absent termination, such senior secured credit facilities mature on June 30, 2026. Borrowings under the senior secured credit facilities bear interest at a fluctuating rate per annum equal to, at the Issuer’s option, the alternate base rate or the Term Secured Overnight Financing Rate (“Term SOFR”), in each case, plus an applicable margin that is calculated based on the Issuer’s leverage ratio from time to time, plus a credit spread adjustment.
The Issuer intends to refinance the senior secured credit facilities by entering into a new credit agreement with the lenders party thereto and Bank of America, N.A., as administrative agent, collateral agent, swingline lender and letter of credit issuer (the “New Credit Agreement”) that will provide for $8.000 billion of senior unsecured revolving credit commitments, with a term of five years (the “senior unsecured credit facility”). The proceeds of any borrowings under the senior unsecured credit facility will be used for general corporate purposes. The substantially concurrent termination of the senior secured credit facilities is a condition to entering into the New Credit Agreement.
The New Credit Agreement will contain affirmative and negative covenants customary for credit facilities of its type, including, among others, limitations on the Issuer and its subsidiaries with respect to liens, incurrence of indebtedness by subsidiaries of the Issuer, and certain fundamental changes. The senior unsecured credit facility will not be guaranteed by the Company or by any subsidiary of the Issuer.
The Issuer will be subject to a financial covenant under the New Credit Agreement, tested quarterly, whereby the leverage ratio may not exceed 4.50:1.00 (with a step-up, upon the Issuer’s election, to 5.00:1.00 during certain specified periods following a material acquisition).
Borrowings under the senior unsecured credit facility will bear interest at a fluctuating rate per annum equal to, at the Issuer’s option, the alternate base rate or Term SOFR, in each case, plus an applicable margin that will be calculated based on the Issuer’s credit rating from time to time, plus a credit spread adjustment. The Issuer currently expects that borrowings under the senior unsecured credit facility will initially bear interest at a rate per annum equal to Term SOFR plus 1.250% (plus a 0.10% credit spread adjustment).