Item 1.01 Entry Into a Material Definitive Agreement.
On August 1, 2014, Universal Health Services, Inc. (the "Company") and certain
of its subsidiaries amended their existing accounts receivable securitization
facility (the "Receivables Facility") with a group of conduit lenders, liquidity
banks, and PNC Bank, National Association, as administrative agent. The
Receivables Facility provides for borrowings outstanding from time to time by
certain of the Company's subsidiaries in exchange for undivided security
interests in their respective accounts receivable and matures on October 25,
The parties to the Receivables Facility entered into Amendment No. 3 (the
"Amendment") to the Amended and Restated Credit and Security Agreement, dated as
of October 27, 2010, pursuant to which, among other things, (i) the borrowing
limit under the Receivables Facility was increased from $275 million to $360
million and (ii) Atlantic Asset Securitization LLC and Credit Agricole Corporate
and Investment Bank became parties to the Receivables Facility.
The foregoing summary description of the Amendment and the transactions
contemplated thereby is not intended to be complete and is qualified in its
entirety by the complete text of the Amendment, a copy of which is attached to
this Current Report on Form 8-K as Exhibit 10.1 and is incorporated herein by
reference as it were fully set forth herein.
Item 1.02 Termination of a Material Definitive Agreement.
On July 31, 2014, the Company redeemed the entire $250 million aggregate
principal amount of its 7% Senior Notes due 2018 (the "2018 Notes") issued and
outstanding, at a cash redemption price equal to the sum of 100% of the
principal amount of the 2018 Notes, accrued and unpaid interest thereon to the
redemption date and an "applicable premium" equal to the excess of (a) the
present value as of the redemption date of (i) the redemption price of the 2018
Notes on October 1, 2014 (such redemption price being 103.500%) plus (ii) all
required interest payments due on the 2018 Notes through October 1, 2014
(excluding accrued but unpaid interest to the redemption date), computed using a
discount rate equal to the treasury rate as of the redemption date plus 50 basis
points, over (b) the then-outstanding principal of the 2018 Notes. The 2018
Notes were redeemed for an aggregate price equal to 104.56% of the principal
amount plus accrued interest to the redemption date. The 2018 Notes were issued
under the Indenture, dated as of September 29, 2010, between the Company, as
successor by merger to UHS Escrow Corporation, and Union Bank, N.A., as trustee
(the "Trustee"), as amended by the Supplemental Indenture, dated as of
November 15, 2010, among the Company, the Trustee and the subsidiary guarantors
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
The information provided in Item 1.01 of this Current Report on Form 8-K is
hereby incorporated into this Item 2.03 by reference.
Item 8.01 Other Events.
New Senior Secured Notes due 2019 and 2022. On July 29, 2014, the Company and
certain of its subsidiaries, as guarantors (the "Subsidiary Guarantors"),
entered into a Purchase Agreement (the "Purchase Agreement") with J.P. Morgan
Securities LLC, for itself and as representative of the several initial
purchasers named therein (collectively, the "Initial Purchasers"), pursuant to
which the Company agreed to sell (i) $300,000,000 aggregate principal amount of
the Company's 3.750% Senior Secured Notes due 2019 and (ii) $300,000,000
aggregate principal amount of the Company's 4.750% Senior Secured Notes due 2022
(collectively, the "Senior Secured Notes"). The Subsidiary Guarantors agreed to
guarantee payment of the Senior Secured Notes on a senior secured basis (the
The offering of the Senior Secured Notes is expected to close on August 7, 2014
(the "Closing Date"). The Company intends to use the proceeds of the offering of
the Senior Secured Notes, together with the proceeds of (i) an amended and
restated Credit Agreement (the "Senior Credit Facility") (further described
below), to be dated on or about the Closing Date, among the Company, the lenders
party thereto and JPMorgan Chase Bank, N.A., as administrative agent and
(ii) borrowings under the Receivables Facility, to refinance (a) certain
outstanding borrowings under the Company's existing Credit Agreement, dated as
of September 21, 2012, as amended (the "Existing Credit Agreement"), among the
Company, the lenders party thereto and JPMorgan Chase Bank, N.A., as
administrative agent, and (b) the Company's 2018 Notes (which were redeemed on
July 31, 2014, as explained in Item 1.02 above).
The Senior Secured Notes and the Guarantees will be secured by (a) a
first-priority lien, subject to specified permitted liens, on certain of the
tangible and intangible assets of the Company and the Subsidiary Guarantors, now
owned or hereafter acquired by the Company and any Subsidiary Guarantor, other
than the Company's real property, accounts receivable sold pursuant to the
Receivables Facility and certain other excluded assets (the "Collateral"). The
Collateral will also secure on a first-priority basis the Senior Credit Facility
and the Company's existing 7.125% Senior Notes due 2016.
The Senior Secured Notes were offered only to qualified institutional buyers
under Rule 144A and to non-U.S. persons outside the United States in reliance on
Regulation S under the Securities Act of 1933, as amended (the "Securities
Act"). The Senior Secured Notes have not been registered under the Securities
Act and may not be offered or sold in the United States absent registration or
an applicable exemption from registration requirements.
Senior Credit Facility. The Company is undertaking to enter into the Senior
Credit Facility, an amendment and extension of the Existing Credit Agreement, on
or about the Closing Date. The Senior Credit Facility will consist of (i) an
$800.0 million revolving credit facility and (ii) a $1,774.5 million Term Loan A
facility, which will be used to refinance the Term Loan A and Term Loan A-2
facilities under the Existing Credit Agreement. The Company also plans to
refinance the Term Loan B facility under the Existing Credit Agreement using
other borrowed funds. The Collateral for the Senior Credit Facility is described
Item 9.01 Financial Statements and Exhibits.
No. Exhibit Description
10.1 Third Amendment to Amended and Restated Credit and Security Agreement,
dated as of August 1, 2014.