Tenet Healthcare Corporation Completes Syndication of $800 Million Credit Facility

Tenet Healthcare Corporation, a leading operator of acute care hospitals and related healthcare services, has announced the completion of the syndication of its previously announced $800 million, 5-year senior secured revolving credit facility. Jointly led by Citigroup as the administrative agent and Bank of America as the syndication agent, the facility was co-arranged by the Bank of Nova Scotia and GE Healthcare Financial Services. This new credit facility replaces the company's previous, unused facility, which was terminated in December 2004 due to substantial liquidity on its balance sheet.

Key Takeaways:

The new credit facility is a $800 million, 5-year senior secured revolving credit facility that was syndicated by Citigroup and Bank of America.
The facility is secured by patient accounts receivables at Tenet's acute and specialty hospitals and includes standard terms and conditions for an asset-backed facility.
The covenants include a minimum fixed charge coverage ratio to be met when available credit under the facility falls below $100 million, and limits on debt, liens, asset sales, and prepayments of senior debt.
The credit facility interest rate will be based on Tenet's selection of a Libor (London Interbank Offered Rate) rate plus 175 basis points or Citigroup's base rate as defined in the credit agreement plus 75 basis points.
The new facility replaces the company's previous, unused credit facility that was terminated in December 2004 due to substantial liquidity on its balance sheet.
Existing letters of credit worth $262.5 million have been transferred into the new credit facility, removing restrictions on the cash and making it available for general corporate purposes.
Tenet Healthcare Corporation, through its subsidiaries, owns and operates acute care hospitals and related healthcare services.

Statistics:

$800 million: the total amount of the new revolving credit facility
5 years: the length of the new facility
$100 million: the threshold below which the minimum fixed charge coverage ratio must be met
175 basis points: the margin above Libor for the credit facility interest rate
75 basis points: the margin above Citigroup's base rate for the credit facility interest rate
$262.5 million: the amount of existing letters of credit transferred into the new facility

Sources:

Tenet Healthcare Corporation: own announcement
Citigroup: industry participation
Bank of America: industry participation
The Bank of Nova Scotia: industry participation
GE Healthcare Financial Services: industry participation
Biotech Business Week editors: authoring the article
NewsRx.com: publishing the article