Tenet sees strong response to debt buyback plan

Tenet Healthcare Corp. (NYSE: THC) received a strong response to its $800 million offer to repurchase debt due for repayment in 2013 as companies continue their push to refinance borrowings. Two weeks ago, Tenet announced a plan to sell $600 million in debt due to be repaid in 2020 to enable it to repurchase the $800 million in debt, the Dallas Morning News reports.

As of Monday's early deadline for investors to buy back debt, $781.5 million of notes had been tendered, or 78 percent of the amount of outstanding notes, according to a press release issued by Tenet Healthcare. The offer as of the deadline was 5.5 percent above face value, plus accrued and unpaid interest.

Investors have until midnight, Aug. 30, to accept Tenet's final tender offer.

"This should reduce debt by about $200 million," Vicki Bryan, senior high yield analyst at Gimme Credit, an independent research service on corporate bonds, told the Dallas Morning News. She added that the company's improved credit profile could give Tenet more flexibility for debt-financed acquisitions, special dividends, and/or stock buybacks.

Tenet's finances are doing much better this year, compared with 2009. At the end of Q2, the hospital system reported net income of $25 million, or 5 cents per share, up from a loss of $15 million, or 3 cents a share, during the same period last year.

To learn more:
- read Tenet Healthcare's private offering press release and another press release on results of its tender offer
- see the Bloomberg Businessweek story
- here's the Dallas Morning News article

Related Article:
Tenet Healthcare Earnings Q2