8-KMaterial AgreementsFinancial EventsExhibits & Filings

HCA Healthcare, Inc. 8-K Report, Material Agreement (Jun 22, 2017)

Filed June 22, 2017For Securities:HCA

Summary

HCA Healthcare, Inc. (HCA) announced on June 22, 2017, the completion of a public offering of $1.5 billion in aggregate principal amount of 5.500% Senior Secured Notes due 2047. These notes are guaranteed on a senior unsecured basis by the Parent Guarantor and on a senior secured basis by certain subsidiaries. The net proceeds, estimated at approximately $1.483 billion after expenses, are intended for general corporate purposes, including funding acquisitions and redeeming the company's outstanding 8.00% Senior Notes due 2018. This transaction represents a significant capital raise aimed at strengthening the company's balance sheet and facilitating strategic growth initiatives. The new notes mature in 2047, offering long-term financing. The specific terms outline the ranking of the notes, guarantees, and collateral securing the obligations, providing clarity on the credit profile for investors.

Key Highlights

  • 1HCA Inc. issued $1.5 billion of 5.500% Senior Secured Notes due 2047.
  • 2Net proceeds from the offering are approximately $1.483 billion.
  • 3Proceeds will be used for general corporate purposes, including acquisitions and the redemption of $500 million of 8.00% Senior Notes due 2018.
  • 4The Notes are guaranteed on a senior unsecured basis by HCA Healthcare, Inc. and on a senior secured basis by certain subsidiaries.
  • 5The Notes are secured by first-priority liens on certain assets, ranking pari passu with existing first lien notes and the cash flow credit facility.
  • 6The collateral securing the Notes may be released if HCA achieves investment grade ratings from both Moody's and S&P.
  • 7The Indenture includes covenants limiting liens, sale and lease-back transactions, asset sales, and consolidations/mergers, with provisions for release or modification upon achieving investment grade ratings.

Frequently Asked Questions

The primary purposes are for general corporate purposes, which may include funding acquisitions, and to redeem the company's outstanding $500 million of 8.00% Senior Notes due 2018. This indicates HCA is refinancing existing debt and securing capital for future growth.

The new notes mature on June 15, 2047, and carry a fixed interest rate of 5.500% per annum, payable semi-annually.

The notes are secured by first-priority liens on certain assets, ranking equally (pari passu) with the company's cash flow credit facility and existing first lien notes. They are effectively senior to unsecured debt and structurally subordinated to debt of non-guarantor subsidiaries. They also have second-priority liens on certain receivables that secure the asset-based revolving credit facility.

The collateral can be released if both Moody's Investors Service and Standard & Poor's assign investment grade ratings to both the Notes and HCA's corporate family rating. Collateral is also released if it is released from securing the company's senior secured credit facilities.