Magazine article American Banker

Hospital Corp. Seeks Better Terms from Banks

Magazine article American Banker

Hospital Corp. Seeks Better Terms from Banks

Article excerpt

Hospital Corporation of America, which filed a big stock offering last week, is seeking to refinance some $2 billion of bank debt on more favorable terms, bankers said.

Company officials didn't return phone calls for comment, but HCA is likely to get a sympathetic ear from its lenders.

Boost for Creditworthiness

HCA's lead banks are also equity investors in the company and stand to reap enormous gains in the value of their holdings if the initial public offering goes as planned.

On Friday, the company said it expects to raise about $700 million from an anitial public offering of 34 million shares of common stock, at an expected price of about $20.50 each.

The banks paid $2.50 a share for their shares less than three years ago, when they helped finance a $5.1 billion management-led buyout of the company.

Proceeds from the proposed stock offering would be used to reduce HCA's bank debt and retire some junk bonds.

"Obviously, with the company raising all this money, it's a much better credit for the banks," said Arthur English, senior vice president in Toronto Dominion Bank's New York office.

Likely Choice of Leaders

Toronto Dominion was part of the group of underwriting banks that provided some $4 billion of bank loans to help finance the 1989 buyout of the Nashville-based hospital management company.

The underwriting group was led by the banking units of J.P. Morgan & Co., and Chase Manhattan Corp. It is expected that Morgan and Chase would lead any refinancing arrangement for the company. …

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