Summary
HCA Healthcare, Inc. (HCA) filed an 8-K on March 13, 2018, to disclose material definitive agreements related to significant debt refinancing activities undertaken by its wholly owned subsidiary, HCA Inc. The company entered into two joinder agreements, establishing new senior secured term loan credit facilities: the Tranche B-10 Term Loan Facility of $1.500 billion maturing in March 2025, and the Tranche B-11 Term Loan Facility of approximately $1.166 billion maturing in March 2023. These new facilities are primarily aimed at refinancing existing debt, including a portion of the senior secured term B-8 loan and the senior secured term B-9 loan. While largely on similar terms to the prior facilities, the new B-10 and B-11 facilities have adjusted interest rate margins and amortization schedules. Investors should note the extension of maturity for a significant portion of HCA's debt and the associated refinancing costs and terms, which are standard for such credit market operations.
Key Highlights
- 1HCA Inc. entered into a new $1.500 billion senior secured term B-10 loan credit facility maturing on March 13, 2025.
- 2The Tranche B-10 loan refinances the existing senior secured term B-8 loan and repays a portion of the senior secured term B-9 loan.
- 3HCA Inc. also entered into an approximately $1.166 billion senior secured term B-11 loan credit facility maturing on March 18, 2023.
- 4The Tranche B-11 loan refinances a portion of the existing senior secured term B-9 loan credit facility.
- 5New facilities have slightly different interest rate margins (LIBOR + 2.00% or Base Rate + 1.00% for B-10; LIBOR + 1.75% or Base Rate + 0.75% for B-11).
- 6Both new facilities include a 0.25% quarterly amortization payment schedule, starting in Q2 2018.
- 7A 1.00% prepayment premium applies to repricing transactions within six months of the joinder agreements' effective date.