Community Health Systems plans to exchange its subsidiary’s outstanding 6.875% junior-priority secured notes due 2029 for new 10.250% senior secured notes due 2035. The proposed deal would extend the debt’s maturity and give participating holders a higher-ranking security, but at a substantially higher interest rate.
The exchange is paired with a consent solicitation that would remove most restrictive covenants and certain default provisions from the existing notes’ indenture. The offer has not yet begun and remains subject to conditions.
Key details
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Debt involved: The subsidiary has about $1.244 billion of the 2029 notes outstanding. The new notes would mature in 2035 and carry a 10.250% coupon, compared with 6.875% on the existing notes.
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Exchange value depends on timing:
- Holders who tender by 5 p.m. New York time on November 23, 2026, and do not withdraw, would receive $1,000 principal amount of new notes for each $1,000 of old notes accepted. That amount includes a $30 early-tender premium.
- Holders who tender after that deadline, but by 5 p.m. on December 10, 2026, would receive $970 principal amount of new notes for each $1,000 of old notes accepted.
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Participating holders would also receive cash for accrued and unpaid interest through, but not including, the settlement date.
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Existing holder support: Institutional investors holding about $643.7 million, or roughly 52% of the old notes, have agreed to tender their notes by the early deadline and provide related consents, subject to conditions. The company expects this support to provide the consents needed for the proposed indenture changes if the exchange and consent solicitation are completed.
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Backstop for notes not tendered: If less than all of the old notes are tendered, the supporting investors have agreed to exchange their 6.125% junior-priority secured notes due 2030 for new notes in an amount matching the untendered portion of the 2029 notes. In return, they would surrender 2030 notes with principal value equal to that amount divided by 0.87. The new notes issued through this separate exchange would have the same terms as those offered to other holders.
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Proposed changes to note protections: The consent solicitation seeks to eliminate substantially all restrictive covenants, certain events of default and other provisions in the existing notes’ indenture. The changes are subject to receiving the required consents and meeting the exchange’s other conditions.
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Expected timing: If the conditions are met or waived, the company expects to settle promptly after the December 10 expiration date, currently targeting the second business day afterward. The company may extend or terminate the offer, and holders would have withdrawal rights under the offer terms.
Plain-English implications
If completed, the transaction would push the exchanged debt’s maturity from 2029 to 2035 and change its stated ranking from junior-priority secured to senior secured. It would also raise the coupon from 6.875% to 10.250% on the new notes. The proposed indenture amendments would reduce protections for holders of any old notes that remain outstanding.