HCA is looking for up to $1 billion in new debt financing and has yet to pick a lead bank. The planned financing, which will be a mix of bond and bank debt, will back the hospital operator's $1.125 billion acquisition of Health Midwest, and HCA expects to bring the bank deal to market by the first quarter of next year, said Mark Kimbrough, v.p. of investor relations. Kimbrough explained that the company is still in the process of completing the transaction after the definitive agreement was signed last month. "The acquisition will be financed through cash and debt," he explained. He would not state any possible banks being considered for the deal or currently involved with the company because HCA wanted to remain open to the lending market, Kimbrough added. Presently, J.P. Morgan leads a $2.5 billion dollar line, while TD Securities leads a $500 million credit for HCA.
Nashville, Tenn.-based HCA won the bid for Health Midwest over Tenet Healthcare Corp. and a range of other companies last October. In addition to the asset purchase, HCA agreed to commit an additional $450 million in capital investments over the next five years as a component to the agreement. In the first two years, HCA committed to spend $300 million for capital improvements and $50 million in capital expenditures in years three, four and five.
HCA is the nation's leading health care provider with approximately 42,000 licensed beds in 23 states, England and Switzerland. HCA, when it was formerly called The Healthcare Company, exited the Kansas City, Mo. area after confronting intense competition from Health Midwest, but the new transaction represents the company's reentrance into the metropolitan Kansas City region by acquiring its former rival.