FRANKLIN, Tenn. - Community Health (NYSE:CYH) Systems, Inc. (NYSE: CYH) has announced the pricing of a $1.225 billion additional offering of its 10.875% Senior Secured Notes due 2032. The offering, expected to close on or about June 5, 2024, is an increase from the previously issued amount in December 2023, bringing the total aggregate principal amount to $2.225 billion.
The newly priced senior secured notes, known as Tack-On Notes, will be offered at 102.000% of their aggregate principal amount, plus accrued interest since December 22, 2023. These notes will rank equally with the existing series of the same maturity.
The proceeds from the notes offering are intended for several financial maneuvers. Specifically, the company plans to redeem all of its outstanding 8.000% Senior Secured Notes due 2026 at par, along with accrued interest. Additionally, $100 million is earmarked for repurchasing other outstanding notes of the issuer. Remaining funds will cover related fees, expenses, and general corporate purposes, which may include repaying a portion of the company's Asset-Based Lending (ABL) Facility.
The notes are being marketed to qualified institutional buyers in the United States under Rule 144A and to international investors in accordance with Regulation S of the Securities Act of 1933. The securities have not been registered under the Securities Act and will not be publicly offered or sold in the U.S. without registration or an exemption from registration requirements.
This press release does not serve as a notice of redemption for the 2026 Notes and should not be considered an offer to sell or a solicitation of an offer to buy any securities. The offering of the Tack-On Notes is made solely by means of a private offering memorandum.
The company's press release includes forward-looking statements subject to risks and uncertainties and states that Community Health Systems does not intend to update these statements except as required by law. This news is based on a press release statement from Community Health Systems, Inc.
InvestingPro Insights
As Community Health Systems (NYSE: CYH) navigates its financial restructuring with the pricing of its additional senior secured notes offering, it's crucial to consider the company's current financial health and market performance. With a market capitalization of $479.69 million and a negative P/E ratio of -3.79, investors are looking at a company that faces significant challenges. A deeper dive into the InvestingPro data reveals a revenue growth of 2.57% over the last twelve months as of Q1 2024, indicating some positive momentum in terms of revenue.
However, the company's financial situation is complex. According to InvestingPro Tips, Community Health Systems operates with a significant debt burden and is quickly burning through cash. This aligns with the company's decision to redeem its outstanding 8.000% Senior Secured Notes due 2026 and repurchase other outstanding notes. Additionally, the company's stock price movements have been quite volatile, with a strong return over the last month of 27.27% and over the last three months of 25.52%, reflecting the market's reaction to the company's strategic financial moves.
For investors considering the long-term viability of Community Health Systems, it is important to note that analysts do not anticipate the company will be profitable this year and that it has not been profitable over the last twelve months. On a positive note, the company has seen a large price uptick over the last six months of 29.54%, which may interest those looking for short-term gains.
To gain further insights into Community Health Systems and to access additional InvestingPro Tips, such as the company's position as a prominent player in the Healthcare Providers & Services industry, potential investors can explore InvestingPro. There are currently 10 additional tips listed on InvestingPro, offering a comprehensive view of the company's financial health and market potential. Remember to use coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription, enhancing your investment research capabilities.
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