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Tenet Healthcare (THC) Offers Senior Notes Worth $1.4 B

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Tenet Healthcare Corporation (THC - Free Report) has agreed to issue and sell $1.4 billion of senior notes, carrying an interest rate of 4.25%. This eight-year notes will mature on Jun 1, 2029.

Net proceeds from the issuance of these notes will be used for the payment of fees and expenses. The remainder will be used to redeem all its pending 5.125% senior secured second-lien notes due 2025.

Tenet Healthcare takes measures to enhance its financial flexibility without affecting its liquidity position. It is a highly levered company and regularly refinances debt through tender and exchange offers.

Capitalizing on the low interest rate environment triggered by the COVID-19 pandemic, the company is attempting to lower its interest burden, thereby aiding margin expansion.

Total debt of the company accounts for 93.8% of its capital, higher than the industry’s average of 90%. Its times interest earned is 1.9X, much lower than its industry average of 4.2X. The company exited 2020 with cash and cash equivalents of $2.1 billion, much lower than $15 billion of long-term debt.

It doesn’t have any borrowings outstanding under its line of credit.

Zacks Rank and Price Performance

Over the past year, this hospital company’s stock has rallied 200.3% compared with its  industry’s growth of 94.6%. It holds a Zacks Rank #2 (Buy), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


This share price performance also looks stellar when compared with the stock movements of other companies like HCA Healthcare, Inc. (HCA - Free Report) , Universal Health Services, Inc. (UHS - Free Report) and Select Medical Holdings Corporation (SEM - Free Report) , which have also soared 97.8%, 57.4% and 144.1%, respectively, in the same time frame.

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