Universal Health Services raises $1.1B in senior notes
What's the deal? Universal Health ServicesDealroom has a profile for this one. Try Dealroom → has agreed to issue $1.1 billion of senior secured notes, the company said on August 13. The offering comprises $600 million of 5.500% notes due 2031 and $500 million of 6.000% notes due 2036, guaranteed on a senior secured basis by existing and future subsidiary guarantors.
What does the company do? Universal Health runs acute care hospitals and behavioural health facilities across the US and abroad, offering inpatient and outpatient medical and behavioural health services. It carries a market capitalisation of $10.21 billion.
What's the money for? Proceeds will partly repay borrowings under its revolving credit facility and its 1.650% notes due 2026. The company also cited its proposed acquisition of Talkspace, on which several underwriters serve as advisors.
What could go wrong? The deal deepens Universal Health's reliance on capital markets and bank lenders, and tightens financial links with underwriters that already act as its lenders and arrangers. The most recent analyst rating on the stock is a sell, with a $170.00 price target.
The signal: At $1.1 billion, the raise sits in the top 10% of post-IPO debt rounds among US health companies all-time, across a sample of 1,138 deals. Refinancing near-term maturities while funding an acquisition, it reflects how large healthcare operators lean on public debt markets to manage balance sheets amid mixed cash flow.
Read more: TipRanks
Image credit: Medill DC
