The company has entered into an agreement with Banc of America Securities LLC, Citigroup and SunTrust Bank, in which the three banks have committed to be joint-lead arrangers of the new three-year senior term loan credit facility. Expected to include base borrowing rates of approximately LIBOR plus 2%, the new facility will replace Tenet's existing $500-million, 364-day revolving credit facility, which company officials say is un-drawn and due to mature on February 28, 2003. Proceeds from the new facility will be used to reduce borrowings under the company's other existing bank line, a $1.5-billion multi-year revolving credit facility due in 2006.

Almost all terms and conditions of the new facility are expected to be extremely similar to Tenet's existing credit agreements, except for a change in the leverage covenant to a maximum of 2.5x debt to EBITDA from 3.5x. According to company officials, the company's existing $1.5-billion credit line will be amended to conform its covenants to this new change. Closing and the amendment of the $1.5-billion credit line, which are subject to custom documentation, are expected to be completed by late February.

According to CFO Stephen D. Farber, "this refinancing will maintain Tenet's strong balance street with more than $1 billion of available liquidity." The company, through its subsidiaries, owns and operates 114 acute care hospitals with 27,851 beds. In addition, Tenet and its subsidiaries employ approximately 115,000 people serving communities in 16 states.