HCA Holdings 2012 Annual Report Download - page 138

HCA HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 10 — LONG-TERM DEBT (continued)
2011 Activity (continued)
During October 2011, we issued $500 million aggregate principal amount of 8.00% senior unsecured notes
due 2018. We used the net proceed for general corporate purposes, which included funding a portion of the
acquisition of the remaining interest in HealthONE.
Senior Secured Credit Facilities And Other First Lien Debt
We have entered into the following senior secured credit facilities: (i) a $2.500 billion asset-based revolving
credit facility maturing on September 30, 2016 with a borrowing base of 85% of eligible accounts receivable,
subject to customary reserves and eligibility criteria ($1.470 billion outstanding at December 31, 2012) (the
“ABL credit facility”); (ii) a $2.000 billion senior secured revolving credit facility maturing on November 17,
2016 (none outstanding at December 31, 2012 without giving effect to certain outstanding letters of credit); (iii) a
$542 million senior secured term loan A-2 facility maturing on May 2, 2016; (iv) a $726 million senior secured
term loan A-3 facility maturing on February 2, 2016; (v) a $2.000 billion senior secured term loan B-2 facility
maturing on March 31, 2017; (vi) a $2.373 billion senior secured term loan B-3 facility maturing on May 1,
2018; and (vii) a €241 million, or $317 million-equivalent, senior secured European term loan facility maturing
on November 17, 2013. We refer to the facilities described under (ii) through (vii) above, collectively, as the
“cash flow credit facility” and, together with the ABL credit facility, the “senior secured credit facilities.”
Borrowings under the senior secured credit facilities bear interest at a rate equal to, at our option, either (a) a
base rate determined by reference to the higher of (1) the federal funds rate plus 0.50% or (2) the prime rate of
Bank of America or (b) a LIBOR rate for the currency of such borrowing for the relevant interest period, plus, in
each case, an applicable margin. The applicable margin for borrowings under the senior secured credit facilities
may be reduced subject to attaining certain leverage ratios.
The senior secured credit facilities contain a number of covenants that restrict, subject to certain exceptions,
our (and some or all of our subsidiaries’) ability to incur additional indebtedness, repay subordinated
indebtedness, create liens on assets, sell assets, make investments, loans or advances, engage in certain
transactions with affiliates, pay dividends and distributions, and enter into sale and leaseback transactions. In
addition, we are required to satisfy and maintain a maximum total leverage ratio covenant under the cash flow
credit facility and, in certain situations under the ABL credit facility, a minimum interest coverage ratio
covenant.
Senior secured first lien notes consist of (i) $1.500 billion aggregate principal amount of 8
1
⁄ 2 % senior
secured first lien notes due 2019; (ii) $1.250 billion aggregate principal amount of 7
7
⁄ 8 % senior secured first lien
notes due 2020; (iii) $1.400 billion aggregate principal amount of 7
1
⁄ 4 % senior secured first lien notes due 2020;
(iv) $3.000 billion aggregate principal amount of 6.50% senior secured first lien notes due 2020; (v) $1.350
billion aggregate principal amount of 5.875% first lien notes due 2022; (vi) $1.250 billion aggregate principal
amount of 4.75% first lien notes due 2023; and (vii) $62 million of unamortized debt discounts that reduce the
senior secured first lien indebtedness. Capital leases and other secured debt totaled $423 million at December 31,
2012.
We use interest rate swap agreements to manage the variable rate exposure of our debt portfolio. At
December 31, 2012, we had entered into effective interest rate swap agreements, in a total notional amount of
$4.500 billion, in order to hedge a portion of our exposure to variable rate interest payments associated with the
senior secured credit facility. The effect of the interest rate swaps is reflected in the effective interest rates for the
senior secured credit facilities.
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