Community Health Systems Inc. (CYH), the second-largest U.S. hospital chain, plans to raise $1 billion to refinance notes maturing in 2015.
Proceeds from the new senior debentures due in 2020 will be used to purchase the 8.875 percent bonds at 102.6 cents on the dollar after a July 3 tender offer, the Franklin, Tennessee- based company said today in a regulatory filing. The 2015 notes, rated six levels below investment grade at B3 by Moody’s Investors Service, traded at 102.7 cents to yield 7.86 percent at 8:22 a.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
Community Health Systems is selling the debt less than two weeks after the U.S. Supreme Court decided to leave President Barack Obama’s transformation of the health system substantially intact. Junk bonds of health-care providers rallied after the ruling, which boosted investor optimism for the industry by reducing the risk that the companies will be stuck with unpaid bills.
Credit Suisse Group AG, Bank of America Corp., Citigroup Inc., Credit Agricole SA, Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley, Royal Bank of Canada, SunTrust Banks Inc. and Wells Fargo & Co. are managing the sale, according to the filing.
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