Community Health Gets $6.8 Billion Debt Financing for HMA Merger

Community Health Systems Inc. (CYH), the second-largest U.S. hospital chain, obtained $6.8 billion in loan commitments backing its purchase of Health Management Associates.

Bank of America Corp. and Credit Suisse Group AG committed debt financing consisting of a $750 million term loan coming due in 2016, $1.5 billion in term loans maturing in 2020 and 2021, a secured bridge loan of as much as $2.2 billion and a $2.4 billion unsecured bridge loan, Franklin, Tennessee-based Community Health said yesterday in a regulatory filing.

Community Health agreed to buy Health Management for $3.9 billion in cash and stock. The takeover is the biggest of a hospital company since 2006, when HCA Inc. was acquired by buyout firms including KKR & Co. for about $33 billion including debt, according to data compiled by Bloomberg.

Health Management, based in Naples, Florida, has about $3.5 billion in debt, while Community Health has $9.1 billion in outstanding borrowings including $4.3 billion in loans, according to data compiled by Bloomberg.

Bridge loans usually mature in one year and are often used as backstops to bond offerings or longer-dated bank debt.

-- Editors: Chapin Wright, Faris Khan

To contact the reporter on this story: Sridhar Natarajan in New York at snatarajan15@bloomberg.net.

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net

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