Tenet to offer $750M in senior secured notes

Fri, 11/04/2011 - 10:45am
The Associated Press

Hospital operator Tenet Healthcare Corp. said Friday it will sell $750 million in senior secured notes and use the proceeds to pay off some older debt.

The Dallas company said the notes, which mature in 2018, will be sold through a private placement. Proceeds from the sale will be used to purchase $714 million in outstanding 9 percent senior secured notes due in 2015. That tender offer expires at midnight, New York City time, Dec. 5.

Moody's Investors Service said in a separate statement Friday that it assigned a B1 rating to Tenet's $750 million offering. That rating is non-investment, or junk grade. Moody's said its existing ratings for the company, which also include a junk-grade B2 corporate family and probability of default rating, remain unchanged.

"The proposed issuance is not expected to meaningfully increase Tenet's leverage, while the tender for the (9 percent) senior notes will alleviate refinancing risk by significantly reducing the block of debt due in 2015, the nearest material maturity," Moody's said.

Shares of Tenet fell 14 cents, or 2.8 percent, to $4.88 in afternoon trading, while broader trading indexes were down less than 1 percent.


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