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Acadia Healthcare Offers Senior Unsecured Notes for $475M
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Acadia Healthcare Company, Inc. (ACHC - Free Report) recently announced the pricing of $475 million aggregate principal amount of senior notes.
The notes carry an interest rate of 5% p.a. and are scheduled to mature in 2029. Subject to customary closing conditions, the notes offering is likely to be completed on the 14th of this month.
At first, this hospital company plans to utilize the net proceeds from this offering to prepay its remaining borrowings under the current Term Loan B facility Tranche B-3. The net proceeds may be put to temporary use for general corporate purposes, which may consist of additional debt repayment, and to pay related fees and expenses.
Interest on the notes will be payable Apr 15 and Oct 15 of each year, starting Apr 15, 2021, semi-yearly in arrears. The notes were offered at a price of 100.000% of the total principal amount.
In fact, the company has been steadily issuing senior notes to enhance its financial flexibility without affecting its liquidity position, which only proves its financial prudence. As a case in point, in June this year, the company had priced $450 million 5.500% senior notes due 2028 with the intention of utilizing the proceeds along with cash in hand to redeem its outstanding 6.125% Senior Notes due 2021 and 5.125% Senior Notes due 2022. It also intended to settle related fees and expenses with the same.
By capitalizing on the low interest rate environment triggered by the COVID-19 pandemic, the company is attempting to reduce its interest burden, thereby aiding its margin expansion.
It is worth noting that the company maintained sufficient cash reserves for preserving liquidity amid the pandemic-induced market volatilities. As of Jun 30, 2020, the company’s cash and cash equivalents soared 70.7% from the level at 2019 end.
Cash flow from operations surged 106% in the first six months of 2020. Consistent cash flow generation provides the company with ample scope for pursuing acquisitions and attaining financial flexibility to chase growth-related activities.
Although its high leverage ratio raises its financial risk, we hope that the company has sufficient capabilities to improve to meet its current obligations.
Last month, another company in the same space, Tenet Healthcare Corporation (THC - Free Report) , issued 6.125% $2.5 billion aggregate principal amount of senior unsecured notes due Oct 1, 2028. Universal Health Services, Inc. (UHS - Free Report) also announced the pricing of $800 million aggregate principal amount of senior secured notes. The notes carry an interest rate of 2.650% and are scheduled to mature on Oct 15, 2030.
Stock to Consider
Investors interested in the industry might also take a look at Community Health Systems, Inc. (CYH - Free Report) . Based in Franklin, TN, the company is one of the largest publicly-traded hospital entities in the United States, and a leading operator of general acute care hospitals and outpatient facilities in communities across the country.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early. See the 5 high-tech stocks now>>
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Acadia Healthcare Offers Senior Unsecured Notes for $475M
Acadia Healthcare Company, Inc. (ACHC - Free Report) recently announced the pricing of $475 million aggregate principal amount of senior notes.
The notes carry an interest rate of 5% p.a. and are scheduled to mature in 2029. Subject to customary closing conditions, the notes offering is likely to be completed on the 14th of this month.
At first, this hospital company plans to utilize the net proceeds from this offering to prepay its remaining borrowings under the current Term Loan B facility Tranche B-3. The net proceeds may be put to temporary use for general corporate purposes, which may consist of additional debt repayment, and to pay related fees and expenses.
Interest on the notes will be payable Apr 15 and Oct 15 of each year, starting Apr 15, 2021, semi-yearly in arrears. The notes were offered at a price of 100.000% of the total principal amount.
In fact, the company has been steadily issuing senior notes to enhance its financial flexibility without affecting its liquidity position, which only proves its financial prudence. As a case in point, in June this year, the company had priced $450 million 5.500% senior notes due 2028 with the intention of utilizing the proceeds along with cash in hand to redeem its outstanding 6.125% Senior Notes due 2021 and 5.125% Senior Notes due 2022. It also intended to settle related fees and expenses with the same.
By capitalizing on the low interest rate environment triggered by the COVID-19 pandemic, the company is attempting to reduce its interest burden, thereby aiding its margin expansion.
It is worth noting that the company maintained sufficient cash reserves for preserving liquidity amid the pandemic-induced market volatilities. As of Jun 30, 2020, the company’s cash and cash equivalents soared 70.7% from the level at 2019 end.
Cash flow from operations surged 106% in the first six months of 2020. Consistent cash flow generation provides the company with ample scope for pursuing acquisitions and attaining financial flexibility to chase growth-related activities.
Although its high leverage ratio raises its financial risk, we hope that the company has sufficient capabilities to improve to meet its current obligations.
Last month, another company in the same space, Tenet Healthcare Corporation (THC - Free Report) , issued 6.125% $2.5 billion aggregate principal amount of senior unsecured notes due Oct 1, 2028. Universal Health Services, Inc. (UHS - Free Report) also announced the pricing of $800 million aggregate principal amount of senior secured notes. The notes carry an interest rate of 2.650% and are scheduled to mature on Oct 15, 2030.
Stock to Consider
Investors interested in the industry might also take a look at Community Health Systems, Inc. (CYH - Free Report) . Based in Franklin, TN, the company is one of the largest publicly-traded hospital entities in the United States, and a leading operator of general acute care hospitals and outpatient facilities in communities across the country.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>