What is HCA think­ing /

Pos­si­ble stock of­fer­ing could raise $3 bil­lion, cut debt

Modern Healthcare - - Front Page - Vince Gal­loro

HCA con­tin­ued last week to take steps to­ward re­solv­ing the debt ma­tu­ri­ties it faces in 2012 and 2013. The big­gest step could come in the form of an ini­tial pub­lic of­fer­ing of stock used to pay down some of that ma­tur­ing debt, ac­cord­ing to two un­named sources quoted by Bloomberg News. The sources said that the of­fer­ing could be worth be­tween $2.5 bil­lion to $3 bil­lion, while an­other un­named source cited in the re­port said it could go as high as $4 bil­lion.

The com­pany also said in a se­cu­ri­ties fil­ing that lenders who fi­nanced its 2006 buy­out have agreed to push back by four years the ma­tu­rity on $2 bil­lion in dif­fer­ent tranches of a term loan due in Novem­ber 2013. In re­turn, HCA is agree­ing to boost the in­ter­est it pays on those tranches by 1 per­cent­age point, the fil­ing said.

The two orig­i­nal sources in the Bloomberg story said that the pro­ceeds of an IPO would go to­ward re­duc­ing HCA’s debt, rather than pro­vid­ing re­turns to the com­pany’s own­ers. The $33 bil­lion lever­aged buy­out of HCA in Novem­ber 2006 was led by three pri­va­tee­quity firms—Bain Cap­i­tal, BAML Cap­i­tal Part­ners and Kohlberg Kravis Roberts & Co.—and mem­bers of both the Frist fam­ily and the man­age­ment team. The com­pany’s debt stood at $25.67 bil­lion as of Dec. 31, 2009, ac­cord­ing to a se­cu­ri­ties fil­ing. Since then, the com­pany has an­nounced a $1.75 bil­lion dis­tri­bu­tion to its share­hold­ers

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