Community Health Systems executives this week scored a notable win in the debt markets, turning a planned $750 million sale of eight-year notes into an offering of $1.775 billion.
The Franklin-based hospital owner will use that money to retire a group of secured notes that would have matured in 2023 and has been paying nearly 10 percent in interest. By contrast, the new notes scheduled to come due in 2029 will pay investors 6.875 percent per year.
The move continues CHS’ efforts to push out many of its long-term liabilities, which totaled $12.86 billion as of Sept. 30. The CHS team’s corporate finance work has been rewarded by analysts at Moody's Investors Service, who this week upgraded the company’s overall rating from Caa3 to Caa2 — they’re still solidly in so-called junk territory — as well as other affiliated ratings. They noted that CHS’ balance sheet had previously included about $5.5 billion in debt maturities in 2023.
Separately this week, CHS’ largest investor sold more than $30 million worth of stock, continuing a two-month run of large divestitures that have cut its stake to 9.2 percent from 24 percent. Affiliates of Shanda Media, which stepped into CHS in mid-2016, have been selling into the stock’s big recent run: They have risen 150 percent over the past six months (Ticker: CYH) and are now at their highest levels since mid-2017. They did, however, fall nearly 2 percent to $9.56 Wednesday.