Summary
HCA Healthcare, Inc. (HCA) filed an 8-K on October 3, 2011, reporting significant financing activities. The company issued $500 million in aggregate principal amount of 8.00% Senior Notes due 2018. The net proceeds, estimated at $492 million after expenses, are intended for general corporate purposes, including partially funding the acquisition of the remaining ownership interest in its HCA-HealthONE LLC joint venture. In addition to the new debt issuance, HCA also entered into a new Asset-Based Revolving Credit Agreement (ABL Credit Agreement) on September 30, 2011. This agreement increases the credit facility to $2.5 billion, extends the maturity date to September 30, 2016, and includes updated terms regarding commitments, pricing, and covenants. This ABL Credit Agreement replaces the company's previous facility and is secured by certain accounts receivable.
Key Highlights
- 1HCA issued $500 million in 8.00% Senior Notes due 2018.
- 2Net proceeds from the note offering are approximately $492 million and are earmarked for general corporate purposes, including a joint venture acquisition.
- 3A new Asset-Based Revolving Credit Agreement (ABL Credit Agreement) was established with a facility size of $2.5 billion, up from $2 billion.
- 4The maturity date for the ABL Credit Agreement was extended to September 30, 2016.
- 5The ABL Credit Agreement includes an increased letter of credit commitment ($250 million) and swingline loan commitment ($125 million).
- 6The company's existing asset-based revolving credit agreement was terminated as part of these new arrangements.
- 7The new ABL Credit Agreement is secured by certain accounts receivable on a first-priority basis.