TENET HEALTHCARE CORPORATION (NYSE:THC) Files An 8-K Entry into a Material Definitive Agreement
Item1.01. Entry into a Material Definitive Agreement
The information set forth below in Item2.03 is incorporated by
reference into this Item1.01.
Item2.03. Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant
On June14, 2017, Tenet Healthcare Corporation, a Nevada
corporation (Tenet), issued $830 million in aggregate principal
amount of 4.625% senior secured first lien notes due 2024 (the
Tenet Secured First Lien Notes) and THC Escrow Corporation III
(THC Escrow Corp.), a Delaware corporation, issued $1.040 billion
in aggregate principal amount of 4.625% senior secured first lien
notes due 2024 (the THC Escrow Secured First Lien Notes), $1.410
billion in aggregate principal amount of 5.125% senior secured
second lien notes due 2025 (the Secured Second Lien Notes) and
$500 million in aggregate principal amount of 7.00% senior
unsecured notes due 2025 (the Unsecured Notes and, together with
the THC Escrow Secured First Lien Notes and the Secured Second
Lien Notes, the THC Escrow Notes; the THC Escrow Notes and the
Tenet Secured First Lien Notes are collectively referred to as
the Notes). THC Escrow Corp. was established to issue the THC
Escrow Notes.
The Tenet Secured First Lien Notes were issued to an indenture,
dated November 6, 2001, between Tenet and The Bank of New York
Mellon Trust Company, N.A., as successor trustee to The Bank of
New York (the Trustee), as supplemented by a supplemental
indenture (collectively, the Tenet Secured First Lien Indenture),
among Tenet, the guarantors party thereto, and the Trustee, dated
June 14, 2017. The THC Escrow Secured First Lien Notes were
issued to an indenture, dated June 14, 2017, between THC Escrow
Corp. and the Trustee (the THC Secured First Lien Indenture). The
Secured Second Lien Notes were issued to an indenture, dated June
14, 2017, between THC Escrow Corp. and the Trustee (the Secured
Second Lien Indenture). The Unsecured Notes were issued to an
indenture, dated June 14, 2017, between THC Escrow Corp. and the
Trustee (the Unsecured Indenture and, together with the Tenet
Secured First Lien Indenture, the THC Secured First Lien
Indenture and the Secured Second Lien Indenture, the Indentures).
On June 14, 2017, Tenet deposited with the Trustee an amount
sufficient to fund the redemption of $900 million aggregate
principal amount of its outstanding Floating Rate Senior Secured
Notes due 2020 (the 2020 Floating Rate Notes) on July 14, 2017,
thereby fully discharging the 2020 Floating Rate Notes as of June
14, 2017. Tenet intends to use the remaining net proceeds of the
sale of the Notes, after payment of fees and expenses, to fund
the redemption of $500 million aggregate principal amount of its
outstanding 8% Senior Notes due 2020 (the 2020 8% Notes), $1.100
billion aggregate principal amount of its outstanding 5% Senior
Notes due 2019 (the 2019 Notes), and $1.041 billion aggregate
principal amount of its outstanding 6.25% Senior Notes due 2018
(the 2018 Notes) and, to the extent any proceeds remain
thereafter, for general corporate purposes.
Upon the redemption of each of the 2020 Floating Rate Notes, the
2019 Notes and the 2018 Notes (collectively, the First
Redemption), (i)Tenet shall assume the obligations of the Secured
Second Lien Notes and the Secured Second Lien Indenture, and
(ii)all of the THC Escrow Secured First Lien Notes will be
subject to a mandatory exchange (the Secured First Lien Notes
Exchange) for a like principal amount of newly issued Tenet
Secured First Lien Notes (the Additional Tenet Secured First Lien
Notes). Upon the redemption of the 2020 8% Notes (the Second
Redemption), Tenet shall assume the obligations of the Unsecured
Notes and the Unsecured Indenture. The First Redemption will
occur on July14, 2017 and the Second Redemption will occur on
August1, 2017. Prior to the assumption and exchange transactions
described above, the obligations under the THC Escrow Notes will
be solely the obligations of THC Escrow Corp.
If the First Redemption does not occur on or prior to July19,
2017, the Tenet Secured First Lien Notes, the THC Escrow Secured
First Lien Notes and the Secured Second Lien Notes will be
subject to a special mandatory redemption on the third business
day following July19, 2017 (the Secured Notes Special Mandatory
Redemption Date) at a redemption price of 50% of the principal
amount thereof plus accrued and unpaid interest thereon to but
excluding the Secured Notes Special Mandatory Redemption Date. If
the Second Redemption does not occur on or prior to August4,
2017, the Unsecured Notes will be subject to a special mandatory
redemption on the third business day following August4, 2017 (the
Unsecured Notes Special Mandatory Redemption Date) at a
redemption price of 50% of the principal amount thereof plus
accrued and unpaid interest thereon to but excluding the
Unsecured Notes Special Mandatory Redemption Date.
The Indentures contain covenants that, among other things,
restrict Tenets ability and the ability of its subsidiaries to:
incur liens; provide subsidiary guarantees; consummate asset
sales; 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
Tenets 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
Tenets 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 Indentures also provide that the Notes may become subject to
redemption under certain circumstances, including a change of
control (as defined in the Indentures) of Tenet. Prior to July15,
2020, Tenet may, at its option, redeem the Tenet Secured First
Lien Notes (including, following the Secured First Lien Notes
Exchange, the Additional Tenet Secured First Lien Notes) in whole
or in part, at a redemption price equal to 50% of the principal
amount of the Tenet Secured First Lien Notes being redeemed plus
the applicable make-whole premium set forth in the Tenet Secured
First Lien Indenture, together with accrued and unpaid interest.
On and after July15, 2020, Tenet may, at its option, redeem the
Tenet Secured First Lien Notes in whole or in part, at certain
redemption prices (expressed as percentages of the principal
amount thereof) set forth in the Tenet Secured First Lien
Indenture, together with accrued and unpaid interest. Following
Tenets assumption of the Secured Second Lien Notes and prior to
May1, 2020, Tenet may, at its option, redeem the Secured Second
Lien Notes in whole or in part, at a redemption price equal to
50% of the principal amount of the Secured Second Lien Notes
being redeemed plus the applicable make-whole premium set forth
in the Secured Second Lien Indenture, together with accrued and
unpaid interest. On and after May1, 2020, Tenet may, at its
option, redeem the Secured Second Lien Notes in whole or in part,
at certain redemption prices (expressed as percentages of the
principal amount thereof) set forth in the Secured Second Lien
Indenture, together with accrued and unpaid interest. Following
Tenets assumption of the Unsecured Notes and prior to August1,
2020, Tenet may, at its option, redeem the Unsecured Notes in
whole or in part, at a redemption price equal to 50% of the
principal amount of the Unsecured Notes being redeemed plus the
applicable make-whole premium set forth in the Unsecured
Indenture, together with accrued and unpaid interest. On and
after August1, 2020, Tenet may, at its option, redeem the
Unsecured Notes in whole or in part, at certain redemption prices
(expressed as percentages of the principal amount thereof) set
forth in of the Unsecured Indenture, together with accrued and
unpaid interest.
In connection with the issuance of the Tenet Secured First Lien
Notes, Tenet also entered into an Exchange and Registration
Rights Agreement, dated as of June14, 2017 (the Registration
Rights Agreement), with Barclays Capital Inc. as representative
of the other initial purchasers of the Tenet Secured First Lien
Notes named therein. to the Registration Rights Agreement, in
certain circumstances, Tenet has agreed to use commercially
reasonable efforts to register the Tenet Secured First Lien Notes
with the Securities and Exchange Commission if the Tenet Secured
First Lien Notes have not become freely tradable (as defined in
the agreement) on or before the 380th day following the date
hereof. Upon Tenets assumption of the Secured Second Lien Notes
and the Unsecured Notes, Tenet and Barclays Capital Inc. as
representative of the other initial purchasers of the Secured
Second Lien Notes and the Unsecured Notes will enter into an
exchange and registration rights agreement with respect to the
Secured Second Lien Notes and the Unsecured Notes on
substantially the same terms as the Registration Rights
Agreement.
The foregoing is a summary and is qualified by reference to the
Tenet Secured First Lien Indenture, the THC Secured First Lien
Indenture, the Secured Second Lien Indenture, the Unsecured
Indenture and the Registration Rights Agreement, which are filed
herewith as Exhibits 4.1, 4.2, 4.3, 4.4, 4.5 and 10.1,
respectively, and are incorporated herein by reference.
Item8.01 Other Events.
On June 14, 2017, Tenet issued notices of redemption to the
holders of $900 million aggregate principal amount of the 2020
Floating Rate Notes, $500 million aggregate principal amount of
the 2020 8% Notes, $1.100 billion aggregate principal amount of
the 2019 Notes, and $1.041 billion aggregate principal amount of
the 2018 Notes. The 2019 Notes and the 2018 Notes will be
redeemed on July 14, 2017. The 2020 8% Notes will be redeemed on
August 1, 2017. As described in Item 2.03 above, on June 14, 2017
Tenet deposited with the Trustee an amount sufficient to fund the
redemption of all of its outstanding 2020 Floating Rate Notes on
July 14, 2017, thereby fully discharging the 2020 Floating Rate
Notes.
Item9.01 Financial Statements and Exhibits.
| (a) | The following exhibits are filed as a part of this Report. |
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ExhibitNo. |
Description |
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| 4.1 |
Indenture dated as of November6, 2001, between Tenet and the Bank of New York Mellon Trust Company, N.A., as successor trustee to The Bank of New York (incorporated by reference to Tenets Current Report on Form 8-K, dated November6, 2001 and filed November9, 2001). |
|
| 4.2 |
Twenty-Ninth Supplemental Indenture dated as of June14, 2017, among Tenet, certain of its subsidiaries and The Bank of New York Mellon Trust Company, N.A. |
|
| 4.3 |
Senior Secured First Lien Notes Indenture dated as of June14, 2017, between THC Escrow Corp. and the Bank of New York Mellon Trust Company, N.A. |
|
| 4.4 |
Senior Secured Second Lien Notes Indenture dated as of June14, 2017, between THC Escrow Corp. and the Bank of New York Mellon Trust Company, N.A. |
|
| 4.5 |
Unsecured Notes Indenture dated as of June14, 2017, between THC Escrow Corp. and the Bank of New York Mellon Trust Company, N.A. |
|
| 10.1 |
Exchange and Registration Rights Agreement dated as of June14, 2017, among Tenet, certain of its subsidiaries and Barclays Capital Inc. as representative of the other initial purchasers of the Notes named therein. |
About TENET HEALTHCARE CORPORATION (NYSE:THC)
Tenet Healthcare Corporation (Tenet) is a healthcare services company. The Company operates regionally focused, integrated healthcare delivery networks in large urban and suburban markets in the United States. The Company operates through three segments: Hospital Operations and other, Ambulatory Care and Conifer. With its networks, including acute care and specialty hospitals, which are engaged in providing outpatient facilities and related businesses, the Company provides a range of healthcare services in the communities it serve. It operates approximately 90 hospitals, 20 short-stay surgical hospitals, 475 outpatient centers, nine facilities in the United Kingdom and six health plans through its subsidiaries, partnerships and joint ventures. In addition, its Conifer Holdings, Inc. (Conifer) subsidiary provide healthcare business process services in the areas of revenue cycle management and technology-enabled performance improvement and health management solutions to health systems.