Community Health Systems Announces Proposed Exchange Offer
10/29/19
The Issuer is under no obligation to commence the Exchange Offer. There can be no assurance that the Exchange Offer will be commenced or consummated on the terms described in this press release or at all. The complete terms and conditions of the Exchange Offer will be set forth in an offering memorandum (the “Offering Memorandum”) and related letter of transmittal (the “Letter of Transmittal”), each of which will be distributed to eligible holders of Old Notes in connection with the proposed Exchange Offer.
It is expected that holders whose Old Notes are validly tendered (and not validly withdrawn) at or prior to the early tender deadline with respect to the Exchange Offer (which deadline will be described in the Offering Memorandum) will receive in exchange for each
The percentage of Total Consideration that will be comprised of New Secured Notes that a holder will receive per
The Issuer and certain institutional investors that are holders of the Old Notes (the “Supporting Holders”) have agreed that, subject to satisfaction of certain conditions, such holders will tender in the Exchange Offer (and not withdraw) Old Notes representing approximately 82.8% of the aggregate outstanding principal amount of Old Notes. As a result, holders that exchange their Old Notes after the early tender deadline will not receive any New Secured Notes. See the table below for more information on the composition of the Total Consideration in the following hypothetical scenarios: (1) 82.8% of the aggregate outstanding principal amount of Old Notes are tendered (and not validly withdrawn) at or prior to the early tender deadline (i.e., only Old Notes held by the Supporting Holders are validly tendered (and not validly withdrawn) at or prior to the early tender deadline) and (2) 100% of the aggregate outstanding principal amount of Old Notes are tendered (and not validly withdrawn) at or prior to the early tender deadline.
|
Total Consideration |
|
Hypothetical Participation Percentage |
Principal amount of New Secured Notes issued per $1,000 principal amount of Old Notes tendered |
Principal amount of New Unsecured Notes issued per $1,000 principal amount of Old Notes tendered |
82.8% (Supporting Holders only) |
$321.22 |
$678.78 |
100% |
$265.97 |
$734.03 |
In order to be eligible to receive any New Secured Notes offered in the Exchange Offer, eligible holders must validly tender (and not validly withdraw) their Old Notes at or prior to the early tender deadline.
It is expected that holders whose Old Notes are validly tendered (and not validly withdrawn) after the early tender deadline and prior to the expiration date (which date will be described in the Offering Memorandum) will receive
In addition, holders whose Old Notes are exchanged in the Exchange Offer will receive accrued and unpaid interest in cash in respect of their exchanged Old Notes from the last interest payment date to, but not including, the applicable settlement date for the Exchange Offer (which dates will be described in the Offering Memorandum); provided that in the case of Old Notes tendered after the early tender deadline, the Issuer will deduct from such unpaid interest an amount equal to the entitlement embedded in such holders’ Exchange Notes relating to the period from the early settlement date to the issuance of such Exchange Notes on the final settlement date.
The Exchange Offer will be subject to certain conditions as will be set forth in the Offering Memorandum and Letter of Transmittal, including (i) the Supporting Holders validly tendering (and not validly withdrawing) the 82.8% of the aggregate outstanding principal amount of Old Notes held by them and (ii) the repayment in full and termination of the Issuer’s existing cash-flow based revolving credit facility. The Issuer reserves the right, subject to applicable law, to terminate, withdraw or amend the Exchange Offer at any time and from time to time, as will be described in the Offering Memorandum. Exchanging holders of Old Notes will have withdrawal rights as will be described in the Offering Memorandum.
If after the early tender deadline, all conditions to the Exchange Offer have been or concurrently are or will be satisfied or waived by the Issuer, the Issuer will accept for exchange all Old Notes validly tendered (and not withdrawn) in the Exchange Offer as of such early tender deadline. It is expected that the early settlement date will be on the fourth business day after the early tender deadline.
In connection with the Exchange Offer, the Issuer intends to issue an additional
It is expected that the New Secured Notes will be redeemable, at the Issuer’s option, on or after
It is expected that each indenture governing each series of New Notes (each a “New Notes Indenture”) will contain covenants substantially similar to those included in the Issuer’s outstanding 8.000% Senior Secured Notes due 2026, with additional restrictions on the ability of the Issuer and its restricted subsidiaries to incur any additional secured debt.
It is expected that 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 revolving credit facility, ABL facility and senior notes. In addition, the New Secured Notes and related guarantees are expected to be secured by (i) shared first-priority liens on the collateral that secures the Issuer’s outstanding cash-flow based revolving credit facility and existing secured notes and (ii) shared second-priority liens on the collateral that secures the Issuer’s outstanding ABL facility, in each case subject to permitted liens as will be described in the Offering Memorandum.
The New Notes and any Tack-On Notes will not be registered under the Securities Act of 1933, as amended (the “Securities Act”) or any state securities laws. The New Notes and any Tack-On Notes may not be offered or sold in
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 or any Tack-On Notes and is neither an offer to purchase nor a solicitation of an offer to sell any Old Notes or any 2020 Notes. The Exchange Offer will be made only by, and pursuant to, the terms to be set forth in the Offering Memorandum and the Letter of Transmittal. The Exchange Offer will not be 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. Documents relating to the Exchange Offer, including the Offering Memorandum and Letter of Transmittal, will only be distributed to eligible holders who complete and return an eligibility form confirming they are either (i) a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act) or (ii) not a U.S. person, within the meaning of Regulation S under the Securities Act and a “non-U.S. qualified offeree” (as will be defined in the eligibility letter).
Forward-Looking Statement
Statements contained in this press release regarding the proposed Exchange Offer and the other anticipated transactions described herein are forward-looking statements that 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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Source:
Investor Contacts:
Thomas J. Aaron
Executive Vice President
and Chief Financial Officer
615-465-7000
Ross W. Comeaux
Vice President – Investor Relations
615-465-7012