Tenet Healthcare Corporation Secures $800 Million Revolving Credit Facility

Tenet Healthcare Corporation (THC) has secured a 5-year, $800 million senior secured revolving credit facility from a group of banks led by Citigroup and Bank of America. The facility is secured by patient accounts receivable at Tenet's acute care and specialty hospitals. The company expects the new credit facility, combined with its existing cash on hand, to provide adequate liquidity to meet its future operating needs.

Key Takeaways:

• Tenet Healthcare Corporation has secured an $800 million senior secured revolving credit facility from a group of banks led by Citigroup and Bank of America.
• The facility is secured by patient accounts receivable at Tenet's acute care and specialty hospitals.
• The company expects the new credit facility to provide adequate liquidity to meet its future operating needs.
• The facility will also provide an additional $200 million in available credit, depending on the amount of eligible receivables outstanding.
• Tenet has terminated its previous $800 million revolving credit agreement and replaced it with a letter of credit facility due to its substantial liquidity on its balance sheet.
• The company has pledged $262.5 million in restricted cash to support its existing letters of credit, which will be rolled into the new credit facility.
• The new credit facility will remove restrictions on the cash, making it available for all corporate purposes.
• Tenet Healthcare Corporation operates acute care hospitals and related healthcare services through its subsidiaries.

Statistics:

• $800 million: the amount of the senior secured revolving credit facility secured by patient accounts receivable.
• 5 years: the term of the credit facility.
• $200 million: the additional amount of credit available, depending on the amount of eligible receivables outstanding.
• $262.5 million: the amount of restricted cash pledged by Tenet to support its existing letters of credit.
• December 2004: the time when Tenet terminated its previous revolving credit agreement.
• 2006: the year the article was prepared by Biotech Business Week editors.

Sources:

• Tenet Healthcare Corporation press release
• "Biotech Business Week" via NewsRx.com, copyright 2006