Community Health Systems Announces Consideration for Tender Offer of 5.625% Senior Secured Notes Due 2027
Community Health Systems one of the largest publicly traded hospital companies in the United States, announced today the consideration payable for its previously disclosed cash tender offer to purchase all outstanding 5.625% Senior Secured Notes due 2027 (the “2027 Notes”). The offer is being made by CHS/Community Health Systems, Inc., a wholly owned subsidiary of the Company (the “Issuer”), and is subject to the terms and conditions outlined in the Offer to Purchase dated July 28, 2025, as amended.
The Company originally launched the Tender Offer as part of its ongoing capital management strategy, which aims to optimize its debt profile, potentially lower interest costs, and enhance financial flexibility. By repurchasing the 2027 Notes ahead of their scheduled maturity, Community Health Systems may also seek to take advantage of current market conditions and investor demand for liquidity.
Early Tender Consideration and Calculation
Under the terms of the Tender Offer, the consideration payable to noteholders depends on when they tender their 2027 Notes.
For holders who validly tendered their notes on or before the Early Tender Deadline, the Company has determined the “Early Tender Consideration” to be $1,002.65 per $1,000 principal amount of 2027 Notes accepted for purchase. This figure includes an Early Tender Payment—an incentive premium—of $30 per $1,000 principal amount for those who acted before the deadline.
The consideration amount was calculated according to the methodology described in the Offer to Purchase, which references:
- The fixed spread stated in the Offer to Purchase table.
- The yield of 4.293% based on the bid-side price of a specified U.S. Treasury security.
- Market data sourced from the Bloomberg Reference Page cited in the Offer to Purchase.
- The calculation date and time: 10:00 a.m., New York City time, on August 11, 2025.
This yield-based pricing method is standard in fixed income markets and ensures the repurchase price reflects both prevailing interest rate conditions and the specific premium the Company is willing to pay to retire the notes early.
Late Tender Consideration
Holders who tender their 2027 Notes after the Early Tender Deadline but before the Expiration Time will be eligible for the “Late Tender Consideration.” This amount equals the Early Tender Consideration minus the Early Tender Payment, effectively removing the $30 per $1,000 incentive premium.
This tiered approach to consideration encourages early participation, giving the Company more certainty about the volume of notes it will retire while rewarding early-acting investors.
Settlement Dates and Interest Payment
For 2027 Notes validly tendered on or before the Early Tender Deadline and accepted for purchase, the settlement date is expected to be August 12, 2025.
Regardless of whether holders qualify for Early or Late Tender Consideration, any notes purchased in the Tender Offer will also receive accrued and unpaid interest from the last interest payment date up to—but excluding—the applicable settlement date. This ensures noteholders are compensated for the interest they would have otherwise earned during the period leading up to the Company’s purchase.
Expiration and Conditions
The Tender Offer is scheduled to expire at 5:00 p.m., New York City time, on August 25, 2025, unless extended or terminated earlier by the Issuer.
As with most debt tender offers, completion is subject to the satisfaction—or waiver—of certain conditions outlined in the Offer to Purchase. These conditions may include, but are not limited to:
- Receipt of valid tenders.
- Regulatory approvals where applicable.
- Market conditions and other business considerations.
The Company has not disclosed any intention to redeem the 2027 Notes outside of this Tender Offer, and the press release explicitly states that it does not constitute a notice of redemption.
Role of Financial Advisors and Information Agents
The Issuer has engaged Citigroup Global Markets Inc. to act as the dealer manager for the Tender Offer. Dealer managers typically serve as the primary coordinators between the issuer and investors, facilitating communication, assisting with pricing, and ensuring compliance with securities regulations.
Holders with questions about the Tender Offer can contact Citigroup Global Markets Inc.:
- Toll-free: (800) 558-3745
- Collect: (212) 723-6106
The Company has also appointed Global Bondholder Services Corporation as the depositary and information agent. This entity manages the receipt of tendered notes, distributes tender offer documents, and processes settlement. They can be reached at:
- Toll-free: (855) 654-2015
- Collect: (212) 430-3774
- Email: contact@gbsc-usa.com
Legal Disclaimers and Limitations
The press release includes standard legal language making it clear that:
- This announcement is not an offer or solicitation to buy or sell any securities.
- Any actual offer is made solely through the Offer to Purchase.
- The Tender Offer is not being made in any jurisdiction where it would violate securities, “blue sky,” or other laws.
- Participation is voluntary—holders must decide for themselves whether and how much to tender.
Such disclaimers are typical for financial transactions of this nature, designed to ensure compliance with U.S. securities law and avoid any implication that the Company is soliciting participation outside of approved channels.
About the 5.625% Senior Secured Notes Due 2027
The 2027 Notes were originally issued by the Company to finance corporate operations, repay existing debt, or support other capital requirements. Carrying a fixed annual coupon of 5.625%, these notes are senior secured obligations, meaning they are backed by specific company assets and hold priority over unsecured debt in the event of default.
While the notes are not due until 2027, early repurchase allows Community Health Systems to potentially refinance at lower interest rates or reduce its total outstanding debt—both of which could strengthen its balance sheet.
Strategic Rationale
Although the Company did not explicitly state its reasons for initiating the Tender Offer, such actions often serve several strategic purposes:
- Debt Reduction – By retiring debt early, the Company can reduce interest expense over time.
- Refinancing Opportunities – If market conditions are favorable, the Company might issue new debt at lower rates.
- Balance Sheet Flexibility – Lower leverage can improve credit ratings, potentially reducing borrowing costs.
- Investor Relations – Providing liquidity to noteholders can enhance relationships with the debt investor community.
Given ongoing volatility in credit markets and potential shifts in interest rates, locking in a transaction now could be financially prudent.
Next Steps for Noteholders
Investors who wish to participate must follow the procedures outlined in the Offer to Purchase. Key points include:
- Early Tender Deadline has already passed; only Late Tender Consideration remains available.
- Expiration Time is 5:00 p.m. (New York City time) on August 25, 2025.
- Notes tendered after the deadline will not be accepted unless the Company extends the offer.
Holders are strongly encouraged to consult with their financial advisors to evaluate the economic implications of tendering versus holding the notes to maturity.
