Community Health Systems 2015 Annual Report Download - page 138

COMMUNITY HEALTH SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
practices, (11) engage in sale and leaseback transactions or (12) change the Company’s fiscal year. The Company
is also required to comply with specified financial covenants (consisting of a maximum secured net leverage ratio
and an interest coverage ratio) and various affirmative covenants. The Company was in compliance with all such
covenants at December 31, 2015.
Events of default under the Credit Facility include, but are not limited to, (1) CHS’ failure to pay principal,
interest, fees or other amounts under the credit agreement when due (taking into account any applicable grace
period), (2) any representation or warranty proving to have been materially incorrect when made, (3) covenant
defaults subject, with respect to certain covenants, to a grace period, (4) bankruptcy events, (5) a cross default to
certain other debt, (6) certain undischarged judgments (not paid within an applicable grace period), (7) a change
of control, (8) certain ERISA-related defaults and (9) the invalidity or impairment of specified security interests,
guarantees or subordination provisions in favor of the administrative agent or lenders under the Credit Facility.
As of December 31, 2015, the availability for additional borrowings under the Credit Facility, after taking into
account the $159 million outstanding at that date, was approximately $841 million pursuant to the Revolving
Facility, of which $66 million was set aside for outstanding letters of credit. CHS has the ability to amend the
Credit Facility to provide for one or more tranches of term loans or increases in the Revolving Facility in an
aggregate principal amount of $1.5 billion, which CHS has not yet accessed. As of December 31, 2015, the
weighted-average interest rate under the Credit Facility, excluding swaps, was 4.3%.
As of December 31, 2015, the term loans and outstanding revolving credit loans are scheduled to be paid with
principal payments for future years as follows (in millions):
Year Amount
2016 ................................................................ $ 162
2017 ................................................................ 212
2018 ................................................................ 2,149
2019 ................................................................ 1,883
2020 ................................................................ 29
Thereafter ........................................................... 2,782
Total ............................................................... $ 7,217
As of December 31, 2015, the Company had letters of credit issued, primarily in support of potential
insurance-related claims and certain bonds, of approximately $66 million.
8% Senior Notes due 2019
On November 22, 2011, CHS completed its offering of $1.0 billion aggregate principal amount of 8% Senior
Notes due 2019 (the “8% Senior Notes”), which were issued in a private placement. The net proceeds from this
issuance, together with available cash on hand, were used to finance the purchase of up to $1.0 billion aggregate
principal amount of CHS’ then outstanding 8
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⁄ 8 % Senior Notes and related fees and expenses. On March 21,
2012, CHS completed the secondary offering of an additional $1.0 billion aggregate principal amount of 8%
Senior Notes, which were issued in a private placement (at a premium of 102.5%). The net proceeds from this
issuance were used to finance the purchase of approximately $850 million aggregate principal amount of CHS’
then outstanding 8
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⁄ 8 % Senior Notes, to pay related fees and expenses and for general corporate purposes. The
8% Senior Notes bear interest at 8% per annum, payable semiannually in arrears on May 15 and November 15,
commencing May 15, 2012. Interest on the 8% Senior Notes accrues from the date of original issuance. Interest
is calculated on the basis of a 360-day year comprised of twelve 30-day months.
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